Suspect damage claims

Question from Raj updated on 16th February 2017:

I have a tenant who is vacating in a few weeks. They have now called and said there was some damage to the property (damage to roof eave near garage) caused by dogs or intruders (which they didn't see). When I inspected the damage it was obvious that the damage was caused by a moving truck backing down the driveway. I have taken photos.

My conversations with the tenant suggest they assume I will claim on my insurance. I have a high excess and have never claimed insurance before so I am reluctant to take this option, especially considering the improbable story about dogs damaging the roof at night. Can I take this dispute up in court? What are my options?

Our expert Allan Galloway responded:

As a landlord, you can expect normal wear and tear when renting out a property, but if your property is carelessly or intentionally damaged by a tenant, then you have a number of options available to you under the Residential Tenancies Act to resolve the issue.

Firstly, you should check your insurance policy documents before discussing compensation for damage with the tenant, as your policy may cover the damage. If you and your tenant can’t agree who is liable for the damage, you can apply to the Tenancy Tribunal for the matter to be resolved. Copies of relevant insurance policies, photos of the damage, and receipts or quotes for repair should be included to support the application.

If a tenant (or their invited guests) intentionally damages the landlord’s property, the tenant must tell the landlord. The landlord can ask the tenant to repair the damage, or to pay the cost of replacement or repair. Tenants need to tell the landlord if they know of any damage or need for repairs. If the tenant does not notify the landlord as soon as possible the landlord may be able to claim some of the costs of repairing the damage from the tenant if it gets worse. If a landlord or their property manager damages a tenant’s goods, the tenant can ask them to repair those goods, or to pay the cost of replacement or repair.

The Holler & Rouse v Osaki case has been referred to in a number of recent Tenancy Tribunal decisions, prompting the Tribunal to release a Practice Note outlining who is liable for damages to a rental property. The full practice note is available here in the Maintenance and Inspections section, but the relevant points are summarised below:

• If the tenant is found to have intentionally damaged the property (including intentional damage caused by an invited guest) the Tenancy Tribunal can award compensation in accordance with the Residential Tenancies Act. In this case, the landlord’s insurance will not be involved.

• If the damage is caused by carelessness and the damage is covered by the landlord’s insurance, the tenant will not be liable for the cost of repairs, unless it was the result of an imprisonable offence.

• Regardless of whether the landlord has insurance, tenants are not liable for damage caused by fire, flood, explosion, lightning, storm, earthquake or volcanic activity, unless the damage was caused intentionally, was the result of an imprisonable offence, or an act or omission of the tenant (or their invited guest) caused the insurance moneys to be irrecoverable by the landlord. Fire, flood or explosions are not required to be catastrophic natural events – for instance, this covers kitchen fires, floods in the bathroom or laundry and explosions caused by fireworks.

For further information regarding landlord and tenant rights and responsibilities, visit our website and/ or subscribe to our tenancy landlord e-newsletter.

The Ministry of Business, Innovation and Employment provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

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