Unlock your property potential
+64 (0) 21 0232 0257
You may have heard of yet another Amendment to the Residential Tenancy Act, they are coming thick and fast now!
In a nutshell, a key purpose of the Residential Tenancy Amendment Act 2019 is to clarify and balance inequality of outcome between landlords and tenants with regards to damages.
A tenant is now held accountable for accidental or careless damage they cause to a property they rent out. However, tenants’ responsibility is limited and landlords need to give them visibility on their financial risks relating to careless damage exposure. The tenant may have to pay the landlord’s excess on his insurance policy (likely to be between $250 and $2000) or up to 4 weeks rent if the landlord’s insurance does not cover or if the excess amount is more than 4 weeks rent equivalent.
What does this change mean, in practical terms, for people owning a rental property?
For new Tenancy Agreements or renewals signed after 27 August 2019, landlords must tell a tenant if the property is insured, what it is insured for and what is the excess. The Tenancy Agreement must include a statement and insurance disclosure information.
For an existing tenancy, this information must be provided if a tenant requests it.
Failure to provide appropriate insurance information may incur a fine of up to $500.
This Act Amendment is good news for landlords, but it requires a bit of homework. Landlords should dig out these insurance policy papers to check what their property is insured for, or better, talk to an insurance broker as it may be opportune to make changes to the existing cover and optimise the insurance premiums paid.
Landlords should provide a copy of the insurance policy to their property manager who will disclose relevant information to tenants.
Of course, building the habit of regular and thorough inspections to identify damages in the first place and be able to make a claim for a sudden event is paramount. For landlords who want peace of mind or dislike paperwork, Catalise Ltd will comply with all the above requirements, assist with a claim and go the extra mile to unlock your property potential.