Break Ins and Glass Cost

[Davo36]

Have just had my shop in Papakura broken into.

They smashed a couple of windows to get in.

The tenants have replaced the windows and initially said their insurance would cover the cost of this. But now their insurance company is saying it's my cost. And speaking with my broker, it appears it is. I have the standard agreement to lease 6th edition. Deed of Lease still to be done. They've only been there 3 months.

The situation used to be that it was the tenant's cost, but there were court cases and now it's the landlords. Sound familiar to the residential situation?

Anyway, so it looks like I'll have to make a claim in and my excess will be $1000. And if it keeps happening then apparently the excess will quickly rise to $2500 and go up steeply from there.

So I want to know what, if anything I can do about this. I don't want to be up for thousands of dollars each time this happens.

Any commercial landlords out there got any advice?

[Phixyt]

The first schedule outgoings should state that the tenant is liable to pay any insurance claim excess (up to a certain amount) however, it might be tricky with only having an agreement to lease. S269 of the Property Law Act states that the lessee is exonerated if the lessor is insured but clause 23.2 in the second schedule 6th ed Deed of Lease states that the insurance excess is considered to be an uninsured portion of the property and under S271 of the PLA the tenant can be charged for this.

Residential tenants get away with the landlord paying because the PLA was applied to the Osaka case but Resi Landlords don't have the clause stating that the excess is considered an uninsured portion.

I'd say try and get the tenant to agree to pay it in good faith, show them the clause in the ATL if necessary and they may just agree since they seemed to be ok with paying it before when they believed it was their cost.

[Learning]

Install security screens?

[Phixyt]

Install security screens?

Probably the best option to prevent it happening again if the tenant is willing to chip in.

[Davo36]

Thanks guys, that listing in the outgoings schedule is what I wanted!

I am getting a Deed of Lease now. So hopefully that will cover any future events.

Regarding screens etc. Yes more has to be done. The tenants have been really really slack with their security. They haven't even had a new code put into the alarm, and got that going. It's a good alarm system that I put in some time ago, but as new tenants they just need a new code etc.

I've also talked to them about bars and/or security film (for those who don't know, this is a film that goes on the window, is clear and can't easily be broken - https://www.youtube.com/watch?v=96x2tO9Xuxw). But they seem to be just kind of bumbling along not doing any of this. So I'm getting pretty annoyed about it.

[Perry]

Residential tenants get away with the landlord paying because the PLA was applied to the Osaka case but Resi Landlords don't have the clause stating that the excess is considered an uninsured portion.

Please explicate that a bit. Mainly, are you suggesting that residential LLs can include in a TA, a clause that specifies that an insurance excess is a potential liability for tenants?

[Phixyt]

Please explicate that a bit. Mainly, are you suggesting that residential LLs can include in a TA, a clause that specifies that an insurance excess is a potential liability for tenants?

I haven't queried that with anyone but it seems logical that if the tribunal wants to apply S269 of the PLA to residential tenancies then they should accept applying S271 as well.

The clause isn't allowed to state that the insurance excess is a liability for the tenant but the interpretation of 269 and the Osaka case is that the tenant is only exonerated if the landlord holds insurance and if the landlord does not hold insurance, the tenant would be liable. Section 271 allows for the Lessee to acknowledge that the lessor has not insured, or fully insured, the premises. Clause 23.2 of the ADLS 6th ed Deed of Lease states that the parties agree that the excess represents an amount for which the landlord has not fully insured and by interpretation, this would mean that the tenant could be liable for this portion.

I am not a lawyer and if you're considering adding this to a residential agreement I'd suggest checking it out fully first. If this were to come up in tenancy tribunal it could be very tricky since the tribunal favours tenants so much anyway but this is the way I would interpret it.

[Perry]

Thanks. Perhaps have a glance through this thread. It's dealing essentially with this problem. You might be able to integrate the various notions being discussed.

[redraspberry194]

Hi,
I have been trying to understand my situation regarding broken glass in a commercial building. We have a large broken pane that I don't think would be worth claiming our insurance given the excess is $1000. Generally the tenant has paid for glass damage and in this case I have asked the tenant to repair the window, however they have come back with all this info stating the LL is responsible for covering the cost.

I see a law change was made in 2008. However, this lease is 2006 ADSL 4th Ed and we have it specifically written into the Deed of Lease under 'maintenance and Care of Premises' that the tenant must pay for all repairs to glass damage and breakages. They are a retail food shop and I assume our lawyer wrote this specifically into the lease.

Can the Deed of Lease be overridden when a clause like this is specifically in the Deed? I don't actually think it can be, but tenant is saying yes.

Can anyone confirm if this is post 2008 ADSL leases - this glass legislation change refers to .

Thanks in advance,
sarah

[Davo36]

Question for your lawyer really but I'd say the clause in the Deed of Lease is the relevant one.