Small win for landlords

Landlord concerns about their liability for tenant damage have been growing since the Holler vs Osaki Court of Appeal decision, which left residential landlords liable for accidental damage caused by tenants.

In response, the Tenancy Tribunal adopted a new rule whereby if it is established that damage to a rental property was unintentional, and the landlord has insurance, the tenant does not have to pay for the damage.

Shortly afterwards, a Tribunal ruling left a Foxton landlord liable for the damage to his rental property after his tenant let her dogs urinate in the house – even though the tenancy agreement had specified no pets were allowed.

But, in a change of pace, a new Tribunal ruling in another tenant damage case has come down on the side of the landlord.

Keith Powell, of Nice Place Property Management, said the Tribunal found in his favour in a case where the carpet and curtains in a room of the rental property were damaged by the five cats that were kept closed in the room.

He went to the Tribunal for damages against the tenant for not leaving the room in a “reasonably clean condition” after the tenant left the premises.

Having followed recent Tribunal cases, he was not confident the case would go in his favour, he said.

But the adjudicator found the tenant had “made decisions about the use of the room where her actions would clearly lead to damage to the carpet and curtains”.

As a result, the adjudicator concluded that the tenant’s actions were intentional and found her liable for the damage.

Powell said that his win for his client is a good step in the right direction for the Tribunal and will help other property managers and landlords win Tribunal decisions in cases of proving intent.

“We [property managers] felt like we were fighting an uphill battle with the Tribunal.

“The precedent set by the Osaki and Foxton cases was bad news for landlords – you could just see the insurance premiums rising, but now with this small win I hope other landlords will not let ‘Osaki’ stop them in their tracks.”

NZ Property Investors Federation executive officer Andrew King told media the ruling was a positive sign, which meant the Tribunal had enacted the Oskai case reasonably.

However, landlord advocates, like the NZPIF, continue to campaign for a political solution to the problems posed by the Holler vs Osaki decision and the Tribunal’s related rule.

They have said that, if rulings like that in the Foxton case continue, landlords will get much tougher in their tenant screening and selection processes – which means that families, vulnerable people, and people with pets will find it harder to find rental accommodation.