Are tenants liable for damages caused by reckless or negligent actions?

The case of Osaki and David Russ 2016

 
In the Osaki case, a fire resulting from a tenant cooking was held to be accidental. The landlord was insured therefore the tenant had the benefit of insurance coverage and was not liable for the damages. The Tribunal held it was accidental damage, hence the damages caused were not intended, nor was it negligent or unduly reckless in the tenant’s actions that resulted in the fire.

In a similar case, David Russ of Tekoa Trust appealed a decision of the Tenancy Tribunal when it ruled last year that his tenant, Amanda Stewart, was not liable for damage caused by her dogs urinating throughout the Foxton house she rented. David Russ appealed this decision in the Palmerston North District Court.

“Conduct will be intentional when it is deliberate, and not accidental, and [resulting damage] will be intentional if the defendant meant to cause it or (probably) knew it was going to result,” the (District Court order) said regarding the reference.”

The Tenancy Tribunal based its decision on the landmark “Osaki” court case, in which tenants who accidentally set fire to their rental house did not have to pay for the damage. Landlords around the country became concerned that if they had insurance, the tenant would not have to pay even in cases of carelessness. However, the Palmerston North District Court has overturned the tribunal’s decision and ordered Stewart to pay about $3790 in carpet replacement costs, court costs and lost rent.

Judge David Smith said he was “of the view” that the tribunal adjudicator was wrong for concluding the damage was unintentional. Stewart the tenant, Not only breached a no-dog clause in her tenancy agreement, but she had continued to let the dogs in after perhaps a couple of urinating events. District Court used a passage from the Brookers Summary Offence, a legal textbook, to support its decision.

“Conduct will be intentional when it is deliberate, and not accidental, and [resulting damage] will be intentional if the defendant meant to cause it or (probably) knew it was going to result,” the court order said regarding the reference.”

Tenancy expert Scotney Williams of Tenancy Services said the appeal case would help both landlords and tenants by clarifying the meaning of unintentional damage.

“The decision being a district court decision creates binding precedent at the Tenancy Tribunal for similar cases”, he said.

In summary:

Tenants will only be exempted from damages caused by fire, flood, explosion, lightning, storm, earthquake or volcanic activity unless it was intentional or resulted from an imprisonable offence.

Fire, flood and explosions may not always be caused by a natural disaster. In this case, it covers kitchen fires, bathroom or laundry floods, and firework explosions.

For liable tenants careless damage, it can be up to the value of your excess or 4 weeks rent (whichever amount is lower). It is on a per-event basis. Accepting more is an unlawful act and you can expect to have significant damages awarded against you.