Tenant damage ruling overturned

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A controversial Tenancy Tribunal ruling on a case where dog urine ruined a rental property’s carpets has been overturned by the Palmerston North District Court.

Friday, February 10th 2017, 9:30AM 2 Comments

by Miriam Bell

The case involved a Foxton tenant who let her dogs urinate in the house she rented – even though the tenancy agreement specified no pets were allowed.

The damage was such that carpets throughout the house had to be replaced.

While the Tribunal adjudicator accepted the damage was due to animal urine, it found that, although the tenant had breached the agreement, the landlord hadn’t established the damage was intentional.

For this reason, the adjudicator did not require the tenant to pay for the cost of replacing the carpet or the lost rental costs.

Landlords around the country were disturbed by the ruling as it appeared to demonstrate how a new Tribunal rule, adopted following the Holler & Rouse v Osaki case, would be applied.

The Tribunal rule states that if it is established damage to a rental property was due to carelessness, rather than deliberate or criminal behaviour, and the landlord has insurance, the tenant does not have to pay for the damage.

In the case in question, the landlord, David Russ from Tekoa Trust, said the way the damage would have been assessed by his insurance company would have left him with a vast excess which made a claim pointless.

Russ appealed the Tribunal decision to the Palmerston North District Court on the basis that the Tribunal had wrongly applied the law.

He argued that the tenant’s actions did not constitute an accidental or careless act but was clearly both an intentional and deliberate act – and the damage should be held to be an intentional act.

The Palmerston North District Court has now ruled in his favour.

Judge David Smith said he approached the case on the basis that it was the Tribunal’s interpretation of the law which was disputed.

He found that the Tribunal adjudicator’s interpretation of the Property Law Act, along with their understanding of the Osaki decision, meant the extent of the damage in the case was not examined fully.

In his view, photos and a report made it clear the carpet had to be replaced.

The adjudicator was wrong to conclude that the damage was not intentional, Judge Smith said.

“The tenant breached the agreement by letting the dogs in. That act was intentional but no loss was caused by that act.

“But after the dogs had urinated on the carpet once or twice, continuing to let the dogs in on numerous occasions – which would have been required to damage the carpets to the extent shown – was a deliberate intentional act by the tenant.”

For this reason, the adjudicator was wrong to decline Russ’s claims for the costs of the damage and the loss of rent and the tenant should pay the costs, Judge Smith found.

Russ said he was pleased with the judge’s decision. “The outcome was what we hoped for as we won on every point and, in the end, common sense has prevailed.”

The decision comes at a time the government is consulting on potential law changes to address the tenant liability issues raised by the Osaki decision.

Read more:

Rental damage law change needed 

Tenants could face liability for some damage 

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