damages compensation
📖 What is damages compensation? Meaning and definition
In New Zealand tenancy law, damages compensation is an amount of money awarded by the Tenancy Tribunal to a landlord or tenant. This compensation is typically ordered when one party has caused financial loss to the other due to actions such as damaging the property beyond fair wear and tear, failing to pay rent, or not complying with other tenancy agreement terms. For example, a tenant might be ordered to pay for repairs to walls, replacement of damaged carpets, or the cost of cleaning and disposing of discarded items.
To successfully claim damages, a landlord must provide evidence that the damage occurred during the tenancy and is more than what is considered fair wear and tear. If this is proven, the tenant can avoid liability only if they can show they did not carelessly or intentionally cause or allow the damage. Tenants are also responsible for damage caused by anyone they permitted to be on the premises.
The amount of compensation can include various costs, such as rent arrears, the expense of replacing furnishings like shower curtains or curtains, lock or key replacement, cleaning services, and minor repairs. In cases where damage is caused carelessly and is covered by the landlord's insurance, the tenant's financial liability is limited to the lesser of the insurance excess or four weeks' rent.
📋 Requirements
- Damage to the premises occurred during the tenancy.
- Damage is more than fair wear and tear.
- The landlord must prove the damage.
- The tenant must prove they did not carelessly or intentionally cause or permit the damage to avoid liability.
- The amounts ordered are proven in evidence and considered reasonable.
📝 Procedure
- A landlord files a claim for compensation with the Tenancy Tribunal.
- The landlord presents evidence to prove the damage occurred during the tenancy and exceeds fair wear and tear.
- The Tenancy Tribunal assesses the evidence and determines if the claim is successful.
- If successful, the Tribunal calculates the specific amounts owed for rent arrears, repairs, replacements, and other related costs.
- An order is issued for the tenant to pay the specified amount immediately, potentially including the release of bond money to the landlord.
💡 Examples
- A tenant was ordered to pay $29,937 for extensive damage to walls, replacement of carpets, and repair of a smashed drainpipe and cladding, as the property was left considerably dirty and damaged with belongings discarded.
- A tenant was ordered to pay $2,490.09, including costs for rent arrears, replacement of a shower curtain and curtains, and lock/key replacement.
- A tenant was ordered to pay $1,315.40, which covered rent arrears, cleaning costs, and the disposal of items and minor repairs at the end of the tenancy.
- A tenant's liability for carelessly caused damage covered by the landlord's insurance was limited to the lesser of the insurance excess or four weeks' rent.
📚 Legal basis
- sections 40(2)(a), 41 and 49B RTA
❓ Frequently asked questions
What kind of damage can I claim compensation for?
You can claim compensation for damage that occurred during the tenancy and is more than normal fair wear and tear. This includes things like holes in walls, broken fixtures, or extensive carpet damage, as long as it wasn't caused by fair use over time.
How do I prove damage for a compensation claim?
You need to provide evidence such as entry and exit reports, photos, videos, invoices for repairs, and statements from witnesses. The Tenancy Tribunal will consider if the evidence proves the damage happened during the tenancy and is beyond fair wear and tear.
What if the damage was caused by someone visiting the tenant?
Tenants are responsible for the actions of anyone they allow onto the premises. If a visitor causes damage, the tenant can still be held liable for the compensation.
Is there a limit to how much a tenant has to pay for careless damage?
Yes, if the damage was caused carelessly and is covered by the landlord's insurance, the tenant's liability is limited to the lesser of the insurance excess or four weeks' rent.
Can I claim for unpaid rent as part of damages compensation?
Yes, rent arrears are commonly included in claims for damages compensation. The Tenancy Tribunal can order a tenant to pay any outstanding rent immediately.
What if I disagree with the compensation amount ordered?
If you disagree with an order, you may have options to apply for a rehearing or appeal the decision, depending on the circumstances. It's advisable to seek legal advice from a qualified lawyer if you wish to challenge a Tenancy Tribunal order.