damage compensation
📖 What is damage compensation? Meaning and definition
In New Zealand tenancy law, damage compensation can be sought by either a landlord or a tenant. Landlords typically seek compensation for damage to the premises that goes beyond normal wear and tear, such as mouldy curtains, a water-damaged bathroom door, or broken windows. To claim this, the landlord must prove the damage occurred during the tenancy and was more than fair wear and tear. Tenants can be held responsible for damage caused carelessly or intentionally by themselves or their guests.
Tenants can also seek compensation from landlords. This might include damages for mould-damaged personal property, loss of amenity (meaning a reduction in the enjoyment or usefulness of the property), or storage costs if they had to move into emergency accommodation due to the landlord's failure to maintain the property, such as not addressing excessive dampness.
For careless damage caused by a tenant after 27 August 2019, if the damage is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent. If the careless damage is not covered by insurance, the tenant's liability is limited to four weeks' rent. However, tenants are fully liable for the cost of repairing damage that is intentional or results from certain activities.
📋 Requirements
- Landlord must prove damage occurred during the tenancy and is more than fair wear and tear.
- Tenant must prove they did not carelessly or intentionally cause or permit the damage to avoid liability.
- For careless damage after 27 August 2019, tenant liability is limited if covered by landlord's insurance.
- Tenant must prove landlord failed to maintain premises (e.g., excessive dampness) to claim compensation.
- Tenant must show specific losses (e.g., damaged property, loss of amenity, storage costs) due to landlord's failure.
📝 Procedure
- Landlord identifies damage after tenancy inspection (e.g., mouldy curtains, damaged door).
- Landlord calculates costs for repair or replacement of damaged items.
- Landlord or tenant makes an application to the Tenancy Tribunal seeking compensation.
- Parties provide evidence, such as expense schedules, to support their claims.
- Tribunal assesses evidence to determine if obligations were breached and if compensation is warranted.
💡 Examples
- A landlord sought $1914.33 for replacing mouldy curtains, a missing shower curtain, a water-damaged bathroom door, and stained bathroom vinyl after a tenant moved out.
- A tenant was ordered to pay $904.20 for rubbish removal and damage to the premises that was more than fair wear and tear.
- A tenant claimed compensation for mould-damaged personal property and storage costs incurred while in emergency accommodation due to the landlord's failure to address excessive dampness.
- A tenant was found liable for the cost of repairing a broken window and blinds because the damage was caused carelessly and exceeded fair wear and tear.
📚 Legal basis
- Housing Improvement Regulations 1947
- sections 40(2)(a), 41 and 49B RTA
❓ Frequently asked questions
What is 'fair wear and tear' and how does it relate to damage compensation?
Fair wear and tear refers to the normal deterioration of a property over time from ordinary use. Landlords cannot claim compensation for fair wear and tear; they must prove the damage is beyond this normal level of deterioration to claim compensation from a tenant.
Can a tenant be held responsible for damage caused by their guests?
Yes, tenants are liable for the actions of people at the premises with their permission. This means if a guest causes damage, the tenant can be held responsible for the cost of repairs.
Is there a limit to how much a tenant has to pay for careless damage?
For careless damage occurring after 27 August 2019, if the landlord's insurance covers it, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent. If not covered by insurance, the liability is limited to four weeks' rent.
What kind of compensation can a tenant claim from a landlord?
Tenants can claim compensation for losses like mould-damaged personal property, loss of amenity (reduced enjoyment of the property), or storage costs if they had to move out due to the landlord's failure to maintain the property, such as not fixing excessive dampness.
What if the damage was intentional?
If the damage is intentional, or results from certain activities, the tenant is liable for the full cost of repairing that damage, without the limitations that apply to careless damage.
How does a landlord prove damage occurred during the tenancy?
A landlord typically proves damage occurred during the tenancy by providing evidence such as entry and exit inspection reports, photos, videos, and communication logs. This helps establish the condition of the property at the start and end of the tenancy.