Landlord paid $4k after $40k of damage, goes to Tenancy Tribunal

By Susan Edmunds of RNZ

A tenant who left a property with $40,000 of damage has been told to pay $4085 to the landlord.

The landlord went to the Tenancy Tribunal seeking compensation and refund of bond for the tenancy, which ended in July.

It was terminated by order of the tribunal because of “continued and excessive damage” to the home.

The landlord told the tribunal there had been 11 separate insurance excesses charged for the repairs. The amount it would cost to repair was more than $40,000.

The tribunal said if it were to award such a claim, the landlord had to prove the tenant caused the damage carelessly or intentionally, or had permitted the damage.

When damage was careless, and if covered by insurance, tenants would be liable for the lesser of four weeks’ rent or the insurance excess.

Where it was careless and not covered by insurance, it was limited to four weeks’ rent.

When it was intentional, tenants were liable for the cost of repair.

The tribunal noted the insurance excess for the property was $750. The owner had been charged one amount of $750 to cover intentional damage and 10 lots of $750 for instances of careless damage in each room.

“The photos show significant damage throughout the property. There are large holes in walls, windows are broken, the alarm has been tampered with, the toilet and vanity are broken, doors have been intentionally damaged, cupboards have been wrenched and the carpet is damaged. The property had been newly renovated when this tenancy commenced.”

The adjudicator said the tenant was fortunate the insurance covered the intentional damage and it was reasonable for her to be liable for the insurance excess.

“They have intentionally and carelessly damaged this home excessively, which will cost the owner a significant amount of time and effort to rectify.”

The tenant had already paid $3780 to the landlord, reducing what she owed to $4085 once the refund of the bond was included.

Auckland Property Investors Association general manager Sabrina Gibbon said many excesses charged highlighted a common problem. Insurers will often charge an excess for each new instance of damage.

“S49B of the RTA caps tenants' liability for careless damage to the lower of the landlord’s insurance excess or four weeks’ rent. On the face of it, the rule looks straightforward and fair enough. But when you overlay how an insurer defines an incident (or an event) the result is often far more consequential financially than a landlord and her tenant realise.

“It is really important, when taking out landlord insurance, to have a clear understanding of how the insurer defines an event. Two spots of stained carpet in the same room is one event for an insurer and two for another. What the landlord can seek through the tribunal and what a tenant can be liable for will therefore be very different.”

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