Prior to 27 August 2019, tenants living in unlawful premises such as sleep-outs or garages were not always protected by the Residential Tenancies Act. Under the new Act, the definition of ‘residential premises’ has been revised. Now, regardless of whether the premises can be legally resided in, they will be under the jurisdiction of the RTA, giving the Tenancy Tribunal full jurisdiction over cases concerning unlawful premises.
It is important to note that under the RTA, landlords must comply with all legal requirements that relate to buildings and health and safety before the start of a tenancy.
At Harcourts, we do not manage properties that do not meet the relevant laws and bylaws, however, if landlords are in doubt about any obligations under an Act, or as to whether a property is lawful, they should take immediate action to investigate and remedy any breach.
New tenancy legislation was passed on 30 July 2019 which will affect landlords and tenants. These changes take effect on 27 August 2019. The bill amends the Residential Tenancies Act 1986 (RTA) and addresses tenant liability for damage, unlawful residential premises and contamination of rental properties.
Tenant liability for damage (and insurance)
There has been confusion in the property management industry since 2016 when a Tenancy Tribunal decision found that a tenant who damaged a rental property ‘carelessly’ could not be expected to pay the cost to repair. Prior to this, the expectation was that if a tenant caused the damage, they paid for the repair.
This amendment addresses a tenant’s liability for a careless act that causes the destruction of, or damage to, a property but limits their liability to a maximum of four weeks rent or the landlord’s insurance excess, whichever is lower.
Tenants get the benefit of a landlord’s insurance claim if they carelessly damage a property.
From 27 August 2019, a landlord must include information about the insurance for the premises in every new Tenancy Agreement. If they do not, this is deemed to be an unlawful act and they can face a penalty of up to $500.
The information must stipulate whether or not the property is insured and if so, what the excess amount is. This statement must also advise a tenant that a copy of the insurance policy is available for them to review upon request.
For existing tenancies, insurance information and/or a policy document must be provided within a reasonable time frame if requested.