Liability for damage
One of the most significant changes is in respect of who pays for accidental damage to a rental property. The law change makes tenants liable for an amount equal to four weeks' rent, or the landlord's insurance excess, whichever is lower, in any incident of damage. Previously the Court had taken the position that tenants should be able to rely on their landlords' insurance - effectively meaning that investors had to carry the cost of any accidental damage.
The result will depend on the view of the insurers, as some insurers regard each instance of damage as a separate event and charge another excess. Stains on the carpet of four rooms, for example, could generate four excess payments. The Tenancy Tribunal will be used to determine how many incidents took place.
Insurance companies will not be able to pursue tenants on the landlord's behalf unless the damage was intentional or due to an unlawful act.
Landlords and property managers now have to give their new tenants (and any other tenants who ask) their insurance details. This is so tenants can understand what they would need to pay in the event of damage.
If they do not provide their insurance details, they can be fined up to $500.
Garages and Sleepouts
Currently, the Residential Tenancies Act does generally not provide protection to people who rent out a garage or sleepout.
The law change amends the definition of a ‘residential premises’ so that regardless of whether or not the property is legally allowed to be lived in, tenants can still go to the Tenancy Tribunal and Tenancy Services can take enforcement action.
The law around contamination allows for new regulations to be developed to prescribe an acceptable level for methamphetamine contamination and processes for testing and decontamination.
This development will allow landlords to test for meth as long as they give the tenants 48 hours' notice that they are entering the property. They will have to tell the tenant what they are testing for and share the results.
With the introduction of this Act and the other recent changes to landlords’ obligations, it is essential that landlords get the correct legal advice as failure to comply can be costly. Contact our office today to ensure you are meeting your obligations as a landlord.