Damage ruling welcomed

01 March 2017

A court ruling which overturned a Tenancy Tribunal decision absolving a tenant of liability for damage caused by her dogs is welcome news for property investors.

The Tribunal ruling last year, concerning a tenant who let her dogs urinate throughout the Foxton rental property, was successfully appealed by the landlord to the Palmerston North District Court. The court found the tribunal was wrong and that the damage caused by the tenant qualified as intentional not accidental, making her liable for costs. The judge said that not only had the tenant breached a no-dog clause in her tenancy agreement but she had continued to let them in after perhaps a couple of accidents.

NZ Property Investors Federation (NZPIF) executive officer Andrew King told landlords.co.nz there could be great variance between Tenancy Tribunal adjudicators’ rulings and the court’s decision would help other adjudicators required to rule on tenant damage.

While it would not necessarily set a precedent, other landlords might decide to appeal similar Tribunal rulings.

Mr King said a proposed law change, now undergoing consultation, would make tenants liable for damage of up to four weeks’ rent or, if it was more, the landlord’s insurance excess. While the NZPIF had suggested some changes, the proposal was a step in the right direction.

Auckland District Law Society vice-president Joanna Pidgeon agreed with the judge’s ruling because if tenants deliberately breached their tenancy agreement they should be held accountable for any resultant damage.

However, she said clarification was needed of some points, including legislative intentions in relation to the Property Law Act exoneration where landlords are insured, and the question of whether there should be different treatment of commercial and residential tenancies with two different pieces of legislation covering each.

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