Are you a Landlord or Tenant or been in a rental property that has been accidently damaged? Who fronts the cost of accidental damage to a rental property has been an ongoing issue since 2016 when a court ruling determined that landlords could not recover the excess of an insurance claim from the tenants.
This resulted in some Landlords having to pay the excess for damages where the tenant damaged the property, and in some circumstances, pay multiple times.
For example, I had a rental a few years ago, where there were no doorstops on the doors and my children opened the doors a little too hard one day, and the door handle went through the wall. Up until now arguably as a tenant I wouldn’t have been responsible for the repair.
Careless Act or Omission by Tenant
Recent changes to the Residential Tenancies Act now provides that a tenant is liable for the destruction of, or damage to a rental property caused by a careless act or omission of the tenant. This liability is limited to the lower of the Landlords insurance excess or four weeks rent.
Where a Landlord can show a tenant has intentionally damaged the property or the damage has occurred by actions which constitute an imprisonable offence, then the tenant is fully liable for that damage, and liability is not limited to four weeks rent or the insurance excess.
How do I protect myself?
We suggest as a tenant you should confirm with your Landlord the level of excess under the insurance policy, so you can determine what your liability could be when an accident happens.
As a Landlord we suggest you consider setting your excess at four weeks rental or less.