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Amendment to RTA - Part one - Tenant Liability

24

July

2017

Amendment to RTA - Part one - Tenant Liability

In response to the Osaki case in which the Court of Appeal made a decision that tenants could not be held responsible for careless or negligent damage, the government addressed the situation by amending the Residential Tenancies Act. The Amendment is likely to be passed into law later this year.

Prior to the Osaki decision, tenants were held responsible for careless damage, essentially with no limits. Some examples of the damage we used to see compensation for were stains on carpets, perhaps from red wine or similar, excessive marks and scrapes to walls.

Since April 2016 the Tenancy Tribunal has had to rule according the Court of Appeals decision that stated that tenants could not be held responsible for careless or negligent damage – although they could still be liable for intentional damage.

The amendment will allow tenants to be found liable for careless or negligent damage with limits, as follows:

  1. If the landlord does not have insurance they can claim the whole of the loss
  2. If the landlord is insured, the claim is per incident, and the liability is the lessor of any insurance excess or a maximum of 4 weeks rent.

The tenant can only repair the damage themselves, if the landlord agrees or there is a provision in the tenancy agreement for them to make the repairs.

It is important to note that it is unlawful to request, demand or accept a payment from a tenant that exceeds the prescribed amount.

Until the Tenancy Tribunal provides practice notes we won’t know exactly how they will rule on tenant damage, but this amendment will provide certainty to tenants and landlords moving forward and allow most damage claims to be settled appropriately.

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