The Residential Tenancies Amendment Act 2019 went into effect on 27 August 2019. It affects both landlords and tenants.
The purpose of the Act is to encourage residential tenants to take good care of their rental properties and to ensure landlords provide cost-effective insurance. The Act also seeks to protect tenants from liability for excessive costs and landlords from facing out-of-pocket expenses for damage caused by tenants’ carelessness. It also renders tenants liable for the careless behaviour of their guests.
Tenants Liable for Damage Caused Carelessly
If residential tenants or their guests damage the rental property due to careless behaviour, they will be expected to pay for the cost of that damage. However, there is a limit to how much tenants have to pay: The maximum is either four weeks’ rent (or four weeks’ market rent, for tenants paying income-related rent) or their landlord’s insurance excess, whichever amount is lower.
If tenants or their guests cause intentional damage, they will be liable for the full cost of that damage. The same is true if the damage was caused by any act or omission that is a criminal offence punishable by law.
All damage that is caused by careless behaviour that is discovered after the Act went into effect will be subject to that Act unless tenants can prove that the damage was caused before 27 August 2019.
Landlords Must Provide an Insurance Statement
Landlords must include a statement in all new residential tenancy agreements that states whether the property is insured and the excess amount of the insurance policies. Landlords must also include a clause that specifies that tenants can view copies of the policies upon request. Landlords must also inform tenants in writing of any changes to this information. There is a penalty of up to $500 for failure to comply with the provisions outlined in the Residential Tenancies Amendment Act 2019.
Landlords must give existing tenants the same insurance information upon request. However, under the Property Law Act 2007, landlords are not legally required to provide insurance information for Housing New Zealand tenancies or residential properties that were rented by registered Community Housing Providers before 27 August 2019. Tenants in these categories are also liable for up to four weeks’ rent or market rent for any damage to a rental property that is caused by careless behaviour.
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Information provided above is for general reference only. While every effort is made to ensure accuracy, Sole Agents Ltd disclaims any liability for any loss or damage whatsover that may arise whether directly or indirectly as a result of any error, inaccuracy or omission.