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Insights and advice for property investors & home owners.

Accidental damages: what does the Court of Appeal’s ruling mean for you?

You’ve probably heard about the recent accidental damages case – the one in which the Court of Appeal ruled that the landlords were liable for damage accidentally caused by their tenants. If not, long story short: a pot of oil left unattended on a kitchen stove resulted in a house being gutted – and AMI Insurance (on the landlords’ behalf) being handed the $216,413 repair bill.

The ruling means that if there’s a shortfall between the money an insurer pays out to a landlord and the cost of the damage, the landlord can’t expect the tenant to cover it. Nor can the landlord ask the tenant to cover the cost of the excess they pay on their own insurance.

What are the implications for property investors?



Will tenants relax, knowing that if they cause damage they’ll be let off the hook? Will they also now be excused for deliberately causing damage?

There is the likelihood of an increase in insurance premiums for landlords and property investors. Sharon Layton, Property Manager from Quinovic Merivale, says, “If insurance goes up, then rents will go up”, hurting the majority of tenants who never cause damage.

How can you protect yourself and your property?

For many landlords this is the stuff nightmares are made of. So how can you protect yourself against a costly accidental damages case?

Probably the most important thing to do is take a close look at your landlord insurance policy.

• Do you have enough insurance to cover the cost of repairing damage caused by a tenant? Has your sum-insured been updated to keep in line with building costs? If there’s a gap, you could be the one footing the bill. 

• It’s also worth checking that you’re meeting all the conditions of your policy. For example, are you inspecting the property often enough? Many policies insist on three monthly inspections. It might pay to inspect your property more often anyway, to make sure your tenants are taking good care of it.


Talk to the experts in property management

The law change has implications for all landlords. If Quinovic is managing your property, however, we can give you the assurance that we’re doing everything we can to protect your investment. Layton says, “We’re always striving for the best quality tenant and our reference checks are vigilant – we always talk to previous landlords and employers, if possible.”

If you’re a DIY landlord, carrying out extensive reference checks is now more important than ever.

Other ways Quinovic strives to help protect landlords against the risk of accidental damage cases include:

• Inspecting properties every three months and reporting the findings to both the owners and their tenants. This, combined with our detailed property condition reports, helps to reduce the chance of property damage. It also meets the requirements of most insurance policies.

• Having proven systems in place, including detailed chattel list reports and extensive photographic evidence, to help to ensure that any cost of damage can be recovered.

• Working with owners to make sure that their property is very well presented 
from the beginning to set a precedent for tenants.

If you want to know more about how we can help you to protect your property against accidental damage, or if you just want advice regarding the change in law, talk to us.

The experts in property care and return

Find out more about our proven Customer Care and Return Systems, or to ask about how we can help protect your property, get in touch with us now.