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Rental Legislation Tips for Landlords in Auckland, NZ

Some recent changes to rental legislation in New Zealand will affect all landlords, and we want to tell you about those things today. The Osaki Case has been widely covered by the media, and deservedly so. It’s been in the news because there has been a huge legal precedent set. The Court of Appeal has ruled that tenants aren’t necessarily liable for accidental damage to a Landlord’s insured property.

Summary of the Osaki Case

A Landlord’s property was rented out to a tenant called Mr. Osaki, and the home was insured by AMI. Mr. Osaki’s wife left a pot of oil on high heat unattended for five minutes. Fire broke out, causing significant damage to the home. The repair cost was $216,000. The insurer indemnified the Landlords for the repair costs but then invoked their rights of subrogation and went to court to recover the repair costs from Mr Osaki.

The Court of Appeal ruled in the tenant’s favour, saying the tenant wasn’t liable for the accidental damage caused to the Landlord’s home. So, that’s a huge legal precedent. The court is saying the tenant is immune from being pursued by the Landlord for accidental damaged to insured property. This means that tenants can potentially piggyback on the owner’s insurance policy. Insurance premiums will probably go up. Our Landlord advice is that basically, take extra care as there is no recourse on tenants for accidental damage, and you should prepare for rising costs when it comes to insuring your homes.

Rental Legislation and Insulation

Another big change lately is with insulation. Insulation will be mandatory in all New Zealand rental properties. This has been implemented to keep homes warmer in winter and cooler in summer. This change is alAuckland Property Manager Discussing Rental Legislationready in effect; insulation has been mandatory from 1 July 2016 in social housing. The remaining rental properties will be bound to this law as of July 2019.

Also in effect for all new tenancies is the requirement that Landlords must disclose to tenants the condition, location, and type of insulation that the rental property has. That must be in your tenancy agreement.

So, there are some changes that will affect all investment properties. If you have any questions, we’d love to hear from you. Please contact us at Walker Weir for any help with property management in Auckland.

December 15th, 2016