Homeowner paid $4,000 after $40,000 in damage

A tenant who left a property with $40,000 in damage has been asked to pay the landlord $4,085.

The landlord went to the Tenancy Tribunal seeking compensation and a refund of the deposit for the tenancy which ended in July.

The court terminated it due to “continued and excessive damage” to the home.

The owner told the court that 11 separate insurance excesses were charged for the repairs. The amount it would cost to repair was more than $40,000.

The court said that if it were to grant such a claim, the landlord must prove that the tenant negligently or intentionally caused the damage, or that the tenant permitted the damage.

Where the damage was caused by negligence and was covered by insurance, tenants would be responsible for the lesser of four weeks’ rent or the insurance excess.

When negligent and not covered by insurance, rent was limited to four weeks.

When it was intentional, tenants were responsible for repair costs.

The court noted that the insurance deductible for the property was $750. The owner was charged an amount of $750 to cover intentional damage and 10 lots of $750 for cases of reckless damage to each room.

“Photos show extensive damage throughout the property. There are large holes in the walls, windows are broken, the alarm has been tampered with, the toilet and sink are broken, doors have been intentionally damaged, cupboards were torn out and the carpet was damaged. The property had been recently renovated at the start of this rental.

The adjudicator said the tenant was lucky the insurance covered the intentional damage and it was reasonable for her to be responsible for the insurance deductible.

“They intentionally and negligently damaged this home excessively, which will cost the homeowner a lot of time and effort to rectify.”

The tenant had already paid $3,780 to the landlord, which reduced what she owed to $4,085, once the deposit refund was included.

Sabrina Gibbon, chief executive of the Auckland Property Investors Association, said the large number of excesses charged highlighted a common problem. Insurers will often charge an additional excess for each new claim.

“S49B of the RTA limits tenants’ liability for reckless damage to the lesser of the landlord’s insurance excess or four weeks’ rent. At first glance, the rule seems quite simple and fair. But when you overlay how an insurer defines an incident (or event), the result is often far more financially consequential than a landlord and tenant might think.

“It is very important when purchasing homeowner’s insurance to understand how the insurer defines an event. Two spots of stained carpet in the same room constitute one event for one insurer and two for another. What the landlord can seek it in court and so what a tenant can be responsible for will be very different.

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