ENGLISH 中文
phone email facebook linkedin wechat whatsapp

Recent Cases Which Affect Your Rights as a Landlord

Friday 13 October 2017

If you own a residential property which is rented, you should be aware of the following cases which came out in the last year or so. They were very favourable to the Tenant:

Parry v Inglis (Tenancy Tribunal Decision dated 27 April 2017 - Application No. 4072105): In this case, the Tenancy Tribunal decided that as the Tenancy premises were not consented or permitted as required by law. Accordingly the premises was unlawful under the Residential Tenancies Act. The Tenant was therefore entitled to a full refund of the rent she paid during the term of the tenancy even though she actually lived there all that time. In that case, rent for 29 weeks and 4 days was fully refunded, together with the bond and the filing fee for the Tenancy Tribunal.

This case is considered as a warning for Landlords who are renting out premises which had no building consent or resource consent. The important thing is to obtain full building consents prior to the tenancy. If the building work has been completed without building consent, then the Landlord should obtain a certificate of acceptance as soon as practicable. If that is not obtained, the Landlord risks losing all the rent for the tenancy.

NZ Court of Appeal case Holler and Rouse v Osaki [2016] NZCA 130: This case finds that the Tenant is not liable for damages to the premises under certain situations. In summary, for a Tenant to be liable for any damage occurred during the course of the tenancy, the damage

occurred must exceed fair wear and tear; and

was intentionally caused by either the tenant or any person in or on the premises with the Tenant’s permission.

If it is established that the damage is caused by careless use of the premises, then the Landlord must disclose whether or not the premises are insured for the event from which the damage arose.

If the Landlord has insurance for the event causing the damage, then the Tenant is entitled to the benefit of the Landlord’s insurance. Therefore the Tenant will not have to pay for the damage. In addition, the Tenant will not have to pay for any of the Landlord’s excess.

If the damage is intentional, the Tenant does not have the benefit of the Landlord’s insurance. Compensation may then be awarded by the Tenancy Tribunal.

If the damage was caused by a natural insurable event such as fire, flood, explosion etc, the Tenant is also not liable for damages UNLESS the Landlord can establish that the damage was caused intentionally or that the Tenant’s actions or omissions caused the insurance monies to be irrecoverable. Accordingly, the Tenant has no liability generally for these events. Note that this is the case even if the Landlord chose to not insure for those events.

Brazier Property Investment Ltd v Penitani [2017] NZDC 1291 (25 January 2017): This District Court case together with the re-hearing of the Tenancy Tribunal case refined the definition of when a Tenant can be considered as intentionally or carelessly damaging the premises.

For example, a tenant allowing a child to take drinks into a carpeted area after the child had spilt a drink on the carpet once or twice before is an intentional act on the part of the Tenant.

Also, swelling and lifting of the laminate around the sink area caused by water leaking from a faulty tap over a period of time was also considered to be consequential damage the Tenant is liable for, if the Tenant fails to notify the Landlord as soon as possible after discovery of the leak of the need for repairs.

The Tenancy Tribunal re-hearing of the Penitani case also referred to the case Tekoa Trust vs Stewart where damage to all carpets in all areas of the house caused by animal urine was considered to be intentional.

However, where a Tenant did not turn up to the Tribunal Hearing, it is not a natural conclusion that any damage was caused intentionally, even though the onus is on the Tenant to prove that the damage was not caused intentionally. A Tribunal will look at the nature and extent of the damage itself to ascertain what the likely cause of the damage was.

Tenancy laws are getting more complicated and often not in favour of the Landlords. Good photos of the premises before the start of a tenancy and regular inspections are important.

 

Note: The information in this article is general only. You should seek advice for specific situations.

KEYWORDS: Tenancy law; Osaki; Inglis
Dunedin Shanghai Association property law section ADLS