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Landlords and tenants beware – more changes to residential tenancy laws which you should know about

The landlord/tenant landscape continues to change. In addition to the recent insulation regulations, the Residential Tenancies Amendment Act 2019 has just passed the Royal Assent and brings with it a number of changes which both tenants and landlords should be aware of.

While the Residential Tenancies Act 1986 remains in force as the principal Act governing residential tenancies, the 2019 Amendment Act provides a number of additions and changes, including:

  • requirements for landlords to provide insurance information to tenants;
  • limiting tenants’ liability for careless damage in rental properties;
  • giving the Tenancy Tribunal full jurisdiction over cases concerning premises that are unlawful for residential purposes, such as garages and sleep-outs, which don’t meet minimum requirements for renting;
  • protecting tenants living in those premises under the Residential Tenancies Act;
  • giving Tenancy Services the ability to take enforcement action against landlords who rent properties which don’t meet minimum standards; and
  • allowing for regulations to be made to address how contamination of rental properties is tested and managed.

The changes which will affect most of our clients are the requirements of landlords to provide insurance information to tenants, and the limitation of liability of tenants in relation to damage to the rental property.

If a tenant causes unintentional damage to an insured rental property then the tenant will only be liable to the landlord for damages to either the amount of its insurance excess or four weeks’ rent – whichever is the lower.  If the act or omission by the tenant is not covered by the landlord’s insurance, then the tenant will still only be liable for a maximum of four weeks’ rent.  The only exception to this is if the tenant’s act or omission constitutes an imprisonable offence.

Landlords should carefully check their insurance policies and consider the areas of risk they face.  Landlords may also want to consider whether or not they can obtain breach of warranty insurance, or similar, which will cover them if their primary insurance policy is rendered void by the tenant’s act or omission leaving them with potentially large repair bills and the right to only recover four weeks’ rental as compensation.

As of 1 August 2019, all tenancy agreements must now contain a statement of the status of insurance on the rented premises and, if the premises are insured, a statement setting out:

  • the extent of a tenant’s liability for damage and the amount of the excess on the policy; and
  • notification that a copy of the insurance policy is available upon request.

Tenants under existing tenancy agreements may request details of insurance information as above, and a landlord must provide the requested information within a reasonable period of time.

Penalties will apply for landlords who fail to comply with the new regime regarding insurance information.

There are a number of experts in our office available to assist you with enquiries in relation to your tenancy agreements.  Please contact Greg Thomas of our commercial team for non-contentious tenancy advice, or Sarah Rawcliffe in our litigation team for advice in relation to tenancy-related disputes.

 

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

For further information

Sarah Rawcliffe - Harkness Henry Partner

Sarah Rawcliffe

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