Tenant damage issue rears head again

The government has confirmed tenancy law reforms will make tenants liable to pay the equivalent of four weeks rent to cover any damage caused to property.

Tuesday, October 23rd 2007, 11:00AM

by The Landlord

Building and Construction Minister Clayton Cosgrove told the NZ Property Investors Federation conference that a Residential Tenancies Bill – likely to be introduced into the House later this year – will limit a tenant’s liability for damage to rental property to four times the weekly rent, if the tenant did not cause the damage intentionally or recklessly.

Martin Evans, president of the NZPIF, says the federation is disappointed by the Bill revisiting the tenant damages issue, rejected by Parliament in 2006 when it threw out The Residential Tenancies (Damage Insurance) Amendment Bill.

“This amount is unlikely to be enough to replace items such as floor coverings or window treatments,” says Evans.
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Other provisions in the Bill notable to landlords include lifting the Tenancy Tribunal’s monetary jurisdiction to $50,000 from $12,000; and allowing landlords to recover reasonable debt collection costs incurred in enforcing Tenancy Tribunal orders through a private debt collection agency. However Evans says the legislation still needs major improvements in the enforcement and debt recovery areas.
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It is also proposed that fixed-term tenancies that expire with no new agreement being signed will automatically become periodic tenancies. Fixed-term tenants will be allowed to apply to end a tenancy early in the event of a substantial and unexpected rent increase.

Tenant breaches such as sub-letting, assigning a tenancy without consent, over-populating the premises or becoming a problem neighbour could result in exemplary damages being awarded, as an alternative to eviction.

Another amendment would extend the Act’s coverage to more people who are renting, such as tenants in boarding houses. This would give them access to the same advice, information and dispute resolution services through the Tenancy Tribunal as other renters.

Evans says the federation will be revisiting all these issues in the written and oral evidence in the Select Committee process.

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