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Standing up for landlordism

Written By: - Date published: 9:44 am, February 19th, 2009 - 89 comments
Categories: national/act government, tenants' rights - Tags: , , ,

So, National has decided to scrap a raft of tenant protections proposed by the last Labour Government and tilt the deck back in favour of landlords. Clearly the new Government thinks tenants have had it too good for too long, and in hard times like these it’s the 8% of New Zealanders who own investment properties that need the most help.

Housing Minister Phil Heatley says he wants to remove limitations on tenant liability for damage to the property, even if the tenant did not cause the damage intentionally or recklessly.

That’s the clause that was inserted after four Dunedin tenants were held financially responsible for someone else setting their flat on fire while they weren’t even on the property. The judge in that case said the outcome “though in accordance with the law, is unjust.” But apparently Phil’s cool with that.

Heatley also wants to scrap the right to professional tenant advocates in Tenancy Tribunal hearings, thereby tipping the balance of power even further in favour of landlords and property managers. Oh, and he also wants to make sure real estate agents can keep charging those extortionate letting fees.

The Auckland Property Investors Association is said to be thrilled.

Good to know whose side they’re on.

89 comments on “Standing up for landlordism ”

  1. rave 1

    I say fuck the landlords and their millionaire MPs.
    How can landlords and tenants be equal before the law?
    How many landlords sleep under the bridge.
    Farmers look after their stock better.
    I blame Labour for not replacing state housing stock.
    Like John Key I was raised in a state house and wouldnt want it any other way.

  2. higherstandard 2

    Why don’t tenants just take out insurance against risk as I’m sure most landlords do.

  3. Redbaiter 3

    Gee, Helen Kl*rk, with (what is it?) six or eight houses, and who while she owned those houses engineered a flood of migrants to push house prices to record highs, and therefore now bears a lot of blame for the current collapse, and is of course a landlord like so many other Labour party members, will be really pleased.

    Of course, she and others of the left could always prepare a rental agreement with an opt out clause in respect of the above changes. Anyone reckon they would??

    PS- I ban TomS from reading Redbaiter comments.

  4. QoT 4

    Look, Tane, these are difficult economic times and the people who helped drive up property prices in the first place and provide the working class with mould-ridden hovels to live in out of the goodness of their own hearts are obviously the ones we need to be taking care of. Where’s your empathy, man?

    *loves her not-rent-raising landlord to bits*

  5. DeeDub 5

    I would humbly suggest it’s not the landlords who prompted NACTM to do this, rather the insurance companies who don’t want to loose their ‘right’ of subrogation.
    Most landlords would not be stupid enough not to insure their properties against such accidental damage or loss.. the only possible losers are the big insurance companies.

    Tick up another one against the little guy!

  6. vto 6

    I say fuck the tenants and their gangster mates.
    There is no equality before the law.
    How many tenants see their hard work smashed up and abandoned?
    Farmers look after their stock better.
    I blame Labour for discouraging landlords from being such.
    Like most people I was raised to respect others property and wouldn’t want it any other way.

    Dear god, who on earth would be a residential landlord…

  7. DeeDub 7

    February 19, 2009 at 10:08 am

    “Why don’t tenants just take out insurance against risk as I’m sure most landlords do.”

    Yeah, and whilst we’re at it let’s make party guests take out insurance for any damage THEY might do accidentally at a party?

    Yeah, that’s the answer… let’s make EVERYONE in the world take out personal liability insurance!

    And while we’re at it can we have some more lawyers please?

  8. TomS 8

    Abraham Lincoln seems terribly topical just now, what with his invocation by Obama in their time of crisis. Unfortunately, it got a bit garbled in its translation to the National Party, which since 1936 has thought he said “…Government of the rentier, by the rentier, for the rentier, shall not perish from the Earth…” and have made that their guiding principle ever since.

  9. Pascal's bookie 9

    “And while we’re at it can we have some more lawyers please?”

    no, no, no, we haven’t finished hanging the current batch yet, and we’re running out of priestgut…

  10. lprent 10

    hs: “Why don’t tenants just take out insurance against risk..”

    Yep – just like car insurance – list all of the drivers of the car flat.

    Did you read the post?

  11. DeeDub 11

    February 19, 2009 at 10:11 am

    “Of course, she and others of the left could always prepare a rental agreement with an opt out clause in respect of the above changes”

    Only if she accepted that such a clause would probably make all her insurance totally worthless.

    Seriously mister Baiter, this is obviously just insurance companies trying to firm up their profits. It’s so obviously not about tenants versus landlords – although it helps their cause to make it appear so. We all know how insurance works and I’m sure the actuaries have the numbers sorted to make them plenty of money without having to sue innocent tenants or their guests…. but I guess NACTM like the idea of gigantic strings of pointless litigation clogging up the courts – if it helps their corporate pals that is.

    Let’s all sue each other and she/he with the most money and best lawyers wins!

    And screw the innocent losers.

    :Rolls eyes:

  12. ropata 12

    This is a stinker from the Nats.

    According to one of the links there are approx 1 million renters in NZ. Making tenants liable for ANY damage by ANYBODY is not about making tenants take ‘personal responsibility’, it’s about landlords avoiding a bit of insurance. Why don’t landlords want to ‘take responsibility’ for their own property?!?

  13. I dont know know how strict the law is going to be, but if your renting and you damage the property your in, you should have to pay for it, and no I dont own property,

  14. Redbaiter 14

    Deedub- It has been decreed that Redbaiter posts must be ignored. Please do not defy this decree, or you will be taken to a place in the country and shot in the back of the head.

    (by a bunch of landlords and lawyers and insurance brokers from the Labour party) –

    [lprent: Take comfort – I don’t ignore them. They get scanned just like the rest of the comments for things that get my moderation reflexes activated.]

  15. higherstandard 15


    “hs: “Why don’t tenants just take out insurance against risk..’

    Yep – just like car insurance – list all of the drivers of the car flat.

    Did you read the post?”

    Ah Yep …….. did you read the link to the case history.

    Ropata read the link the landlord had insurance it was the insurer that went after the tenants.

  16. lprent 16

    hs: Yeah I did, and did you notice that it wasn’t even tenants who caused the damage.

    Don’t know about you, but in the insurance industries eternal search for reduced liability, I suspect that they’d put in restrictions about who and how they’d sell tenant insurance.

    Something similar to car insurance would be my guess. Age related costs and restrictions about who can have access to the property come to mind as being reasonable from the insurance industry side. That gets interesting when you consider it against things like the BORA.

    The public health issues come to mind as people are unable to find a place to live because they’re too young to get tenant insurance…

    Think it through or some mindless Act/SST member will pick it up as being a good policy. They don’t think things through either.

  17. DeeDub 17

    Brett Dale
    February 19, 2009 at 10:45 am

    “I dont know know how strict the law is going to be, but if your renting and you damage the property your in, you should have to pay for it, and no I dont own property,”

    You seem to be saying that damage sustained completely outside the tenants knowledge or control should also be the tenants concern?

    So are you advocating compulsary liability insurance for tenants then? Because that is the only way this stupid law change could possibly work in practice….. who benefits from that?

    Insurance companies. Even without compulsion this amendment will drive up liability cover sales without question.

  18. Pat 18

    So let me get my head around the supposed logic of the argument here…

    If I am a homeowner, and I have a party in which there is some damage done to the property, I am responsible for the cost of the damage.

    If I am a tenant, and I have a party in which there is some damage done to the property, then I should not be responsible for the cost of the damage?

    vto – very good version of rave’s post! I know which version the majority of NZers would agree with (I only have to look at the polls).

  19. DeeDub 19

    All this talk of cars versus houses….

    I mean I understand having to have insurance for my OWN car… but does this kind of bizarre thinking mean if I RENT a car I will have to have my own liability insurance???

    I mean why should the party PROFITTING from the arrangement have to have any liability?

    Patently ridiculous….

    ROLLS EYES for the fifth time today.

  20. higherstandard 20

    A bit harsh Lynn I’m sure there’s the occasional good insurance company out there …….. Good Lord there goes a flight of pigs past the window.

    . and it was a tenant who caused the damage.

    I think the most pertinent comment was the judge’s when he said..

    ” “The outcome of this proceeding, though in accordance with the law, is unjust. It is unlikely that the defendants were ever aware that their landlord (or the landlord’s insurer acting by right of subrogation) might sue them for major damage to their flat, even if caused by the carelessness of one of them. I have no doubt that while most residential tenants assume (almost invariably correctly) that their landlords insure and will be indemnified against damage to, or the destruction of, the insured property, they have little or no understanding of the insurer’s right of subrogation.’

  21. Matthew Pilott 21

    This plus ACC – someone really needs to look at the causes for National’s hard-on for the Insurance industry. Do they all get free Viagra?

  22. DeeDub 22

    Matthew….. ROFL!

  23. MikeE 23

    How many of you have risked your money and lively hood to provide housing for others (i.e. become a landlord)

    How many of you have had to dip into your own pockets to serve the mortgage because the tenant refuses to pay rent, has skipped out, or has done ridiculous amounts of damage to property.

    I have yet to meet a single landlord who doesn’t have horror stories from their tenants.

  24. Tigger 24

    Who sued that tenant? The insurance company or an uninsured landlord. If the former – well, if your name is on the contract so too bad. If the latter then that person is an idiot and shouldn’t own property.

  25. DeeDub 25

    February 19, 2009 at 11:14 am

    “How many of you have risked your money and lively hood to provide housing for others (i.e. become a landlord)

    How many of you have had to dip into your own pockets to serve the mortgage because the tenant refuses to pay rent, has skipped out, or has done ridiculous amounts of damage to property.

    I have yet to meet a single landlord who doesn’t have horror stories from their tenants.”

    Hah hah… you poor landlords make me laugh.

    It’s all good at the end of the year when the profits are counted though, eh?
    Providing housing out the goodness of your heart….. hah hah

    It’s called a ‘market’ when you’re winning and charity when you lose is it?

    What a d***head.

  26. lprent 26

    hs: The insurance company went for for all of the flatmates. From Maryn Street’s introduction to the bill (linked in the post)

    One of the clearest and most definitive judgments on this issue came in the case of Harrison v Shields and others andThe presiding judge was Judge MacAskill.

    The case involved six flatmates at an address in Dunedin. Five of the tenants had signed a common written tenancy agreement. The sixth tenant had not signed it. On 11 June 1999 the only tenant at home at the time left some bacon cooking on the stove and went next door. While he was away, the place caught fire and considerable damage was done. None of the man’s flatmates were home at the time of the fire. The other four signatories to the tenancy agreement did not intentionally, or carelessly, damage the flat by fire. As they were not present in the flat, they had no knowledge of, and were unable to control, their flatmate’s actions.

    See pigs do fly.. The insurance company didn’t just target the stupid one. Wasn’t that generous…

  27. Pascal's bookie 27


    QoT beat you to it.

  28. higherstandard 28


    Pigs don’t fly……….

    “In the event, the judge ruled that the four flatmates who were signatories to the tenancy agreement, as well as the flatmate whose carelessness caused the damage to the property, were jointly and severally liable for the net recoverable loss of $67,381.07 plus interest.”

  29. Matthew Pilott 29

    Pat, somewhat close, but no cigar.

    “If I am a homeowner, and I am not present at a party in which there is some damage done to the property, the person who did the damage is responsible for the cost of the damage.

    If I am a tenant, and I am not present at, nor responsible in any way for a party in which there is some damage done to the property, then I am liable for the cost of the damage”

    Well, that’s how it stands now, due to the majority of residential leasees being jointly and severally liable.

    Try not using terms such as ‘supposed logic’ until you’re sure you understand the argument.

    P.S. there are more tenants in NZ than landlords, and a vast majority of those tenants aren’t ‘gangsters and their mates’, so I suspect you and vto are a touch misguided with your supposition of support for those statements. And tying it to a poll? That’s pretty weak, but I’m sure you knew that!

  30. MikeE 30


    I’m not a landlord.

    I do own a property and have considered using it as a rental (I currently live in it) but I’m too scared to do so after having seen how the tenants treated the unit next door.

    I simply could not afford to pay the thousands of dollars in repair bills that the landlord next door pays.

    Personally – I just think that tenants should be liable for any damaged caused to the property while they are there. Same thing goes with rent, late payment etc… its fair enough.

    You are in a property and you break it, you should have to fix it. You cook P in it, you pay for the cleanup etc.

    What we have now is a situation whereif I go and do an inspection (if I owned a rental) and I found a P lab in there, I wouldn’t be able to kick my tenants out. I’d have to report it to the cops, let them deal with it, then stuff about with the tenancy tribunal. Its pretty much common sense that if people have a P lab in my place, that they sholdn’t be able to do this.

    One of my old flatmates had this happen to him. Ended up costing him something like $30,000 to get the place back up to a standard that he could rent out to a new tenant.

    If you think Landlords have it easy in NZ, you are dreaming. Most are just average Kiwis, trying to get by, struggling with multiple mortgages and having to pick up shit after dodgy tenants.

  31. lprent 31

    Sorry was editing the message (after I read the stuff more closely)…

    It is that joint liability plus if it’d been the non-sig who burnt the bacon…

    It looks like insurance companies don’t believe in individual responsibility..

  32. MikeE 32

    Another example is down the road from me in Ivanhoe road. Long term housing NZ tenant, has a P Lab explode and set the house on fire.

    Housing NZ had to go to the tenancy tribuanal to get costs back, and get this, they still have to provide a state house to the people who were cooking P while they go to court.

  33. DeeDub 33


    You give yourself away with your comment about ‘P labs’. (Edit: Actually after seeing your more recent post I can see that you’re OBSESSED with it?!!)

    I have a family member with a number of ‘investment’ properties. The last thing he would do is bitch to me about how tough it is at the moment after recently building and moving into his new $1.4M home. Yes, he has had some problems… but in the long run he has profited. He realises the costs of being a landlord but at the end of the day he thinks the profit is worth the hassle. Like he always says : ‘If you can’t stand the heat, get out of the kitchen.” – oh and no, no P was cooked in that kitchen….

    It’s a business mate – there are good landlords who get good advice, do the numbers and do business wisely, and then there are people who seem to think it’s a ticket to easy money and get into it without doing a business plan first

  34. lprent 34

    MikeE: but how does this relate to burning bacon? There are few P labs compared to a lot of flats where breakfast gets burnt…

    T o make law based only on the abnormal is pretty draconian.

    For instance, people get drunk in public and sometimes do dangerous things. Does that mean that to prevent this we should have locked up Muldoon and Peter Garrett for possibly being incapable. Both of whom it would have probably been possible to make a prima facie case from where I was sitting watching TV.

  35. Deedub:

    No im saying if some students have their mates around and their mates wreck the place, those students should be liable for damages.

  36. rave 36

    Why don’t we just put tenants in cowsheds and milk them then?
    I don’t wonder that some tenants disrespect private property when their landlords are extracting rent for doing fucking nothing.

    Get this, the only reason that landlords exist is that they have taken advantage of their income to keep workers out of houses by bidding up the price of those houses beyond the income of workers.
    Landlords are parasites and perform no useful social function however they spin it in church or at Rotary.
    Landlords can offset renovation, depreciation etc against taxes and still get a tax free capital gain which they did nothing to earn.

    VTO I grew up in a state house so the property that I respected first was state owned, not my families or some parasite living off our rent. By the age of five I was mowing the lawns not dreaming that I could own this one day and live off the backs of some poor tenant.
    The people I respect are those that work for a living, and don’t live off the workers. I spent a number of years defending tenants from greedy landlords. I can understand the disrespect that some workers have for landlords.

    I agree that tenants damaging property is an issue. I would rather tenants formed tenants associations and took responsibility for looking after property and organising to defend their interests against rapacious landlords, insurance companies and Bankster governments.

    But ultimately the problem is a shortage of state housing, and governments that would rather pay off their rich mates than spend more money to provide public housing for all who need it are the scum of the earth. The only way to clean up such scum is to socialise it.

    capcha: wrong part of town and wrong generation

  37. Rave:

    Are your views represented of the communist party of New Zealand?

    Just asking because of your blog?

  38. tsmithfield 38

    Tane: “That’s the clause that was inserted after four Dunedin tenants were held financially responsible for someone else setting their flat on fire while they weren’t even on the property.”

    So, Tane, by your argument:

    If I lend you my car, and someone else sneaks around in the night and slashes its tyres, you shouldn’t be responsible for fixing the damage?

  39. DeeDub 39

    Brett Dale “No im saying if some students have their mates around and their mates wreck the place, those students should be liable for damages.”

    Even if their name is on the tenancy but they had NOTHING whatsoever to do with the party or it’s consequences?

    Yeah, that’s justice, National-style.

  40. DeeDub 40


    “So, Tane, by your argument:

    If I lend you my car, and someone else sneaks around in the night and slashes its tyres, you shouldn’t be responsible for fixing the damage?”

    Sad-assed anaolgy that ignores the fact that the landlord is not LENDING the premesis to the tenants. He is charging MONEY, supposedly running a business. IMO insurance should be one of the costs he bears. If he wants to pass that on as a part of the rent then so be it – but wouldn’t that make things a lot more simple and less contentious….. oh, but hold on, then the insurance company couldn’t just ‘recover’ it’s costs…

    Work it out for f***s sake!

  41. Deedeb

    No, its justice, fairness style.

    If your going to throw a boozy party and invite people around, then yes you should have to pay your landlord for the damages, while should he/she be out of pocket?

  42. DeeDub 42

    Jesus Brett… what IF you’re not there when your flatmates throw the party. What if you know nothing about it and you’re out of town? Should you have to pay then?

    You’re a fucking twat!

  43. DEEDUB

    The last line doesn’t help your argument. No your other flatmates will be responsible.

  44. Alex 44


    No, its justice, fairness style.

    If your going to throw a boozy party and invite people around, then yes you should have to pay your landlord for the damages, while should he/she be out of pocket?”

    Why should a tenant, who was not there at the time of the party and had nothing to do with it, have to pay for the damage?

    “The last line doesn’t help your argument. No your other flatmates will be responsible.”


  45. Felix 45

    So Brett, are you saying that you’ve completely misunderstood the entire argument? Or that you’ve been in agreement all along?

  46. DeeDub 46

    Brett just isn’t that bright, guys. He thinks life is all about absolutes.

  47. Matthew Pilott 47

    Tane: “That’s the clause that was inserted after four Dunedin tenants were held financially responsible for someone else setting their flat on fire while they weren’t even on the property.’

    So, Tane, by your argument:

    If I lend you my car, and someone else sneaks around in the night and slashes its tyres, you shouldn’t be responsible for fixing the damage?

    No Tsmithfield, if your car is insured and you rent it to me and two other people, and someone slashes the cars’ tyres when I was not using the car, your insurance company should not be able to charge ME for it. That’s the actual car analogy…

    You’re even further away than Pat was.

    Brett, let’s consider this rationally. Say you and I and two others sign a lease, jointly and severally, for a property. What are you and I signing up for? Would you consider yourself liable for my actions, and of the other two? Under current law, you are arguing that yes, you are indeed equally responsible for my actions as I am.

    Now that makes sense when it comes to such things as paying rent and normal maintenance of the property – all us happy tenants should, and are, in the eyes of the law, equally responsible as parties to that contract.

    But you think this should also apply if I am negligent or engage in a wrongful activity that results in damage? Think carefully…

    DeeDub – no need for that eh. Brett has different views, few of which I agree with (And vice versa of course!), but lets keep some decency to the debate please.

    Edit: No your other flatmates will be responsible.

    This is where you are mistaken, Brett. Under a joint and severally liable tenancy contract, you are equally as responsible for your flatmates’ actions as they are!! This is why this discussion, and thread is happening. Labour wanted to change this, National doesn’t.

  48. Felix 48

    Only the Sith deal in absolutes.

  49. I’m just sure that any reasonable landlord would go after the tenant that caused the damaged and not the innocent one.

  50. Matthew Pilott 50

    Only the Sith deal in absolutes.

    I dunno, mathematics at a primary school level probably only deals with absolutes as well.

  51. Alex 51

    Honestly, why doesn’t the right advocate personal responsibility here? A landlord is going into business when he/she lets a property. The landlord knows there is a risk involved and so should be responsible for taking out insurance, especially given how unlikely it is most people would even be able to pay for a burnt down house.

    No matter the number of tenants, tenants are in law one person – “the tenant.” So when one tenant (in reality) destroys property, “the tenant” (i.e, all tenants in reality) are liable for damage. That means guests of one tenant are guests of “the tenant.” “The tenant” is responsible for damage caused by guests. Tenants, in law, are one person. That is why the judge called the law “unjust” in the Dunedin case and why there needed to be a law change.

  52. Matthew Pilott 52

    I’m just sure that any reasonable landlord would go after the tenant that caused the damaged and not the innocent one.

    Unfortunately it’s the insurance companies that do the going after here (though every landlord I’ve dealt with is indeed more reasonable than any insurance company I’ve had to deal with!)

  53. Felix 53

    I dunno, mathematics at a primary school level probably only deals with absolutes as well.

    Statements like “Only the Sith…” are pretty absolute too.

  54. Matthew Pilott 54

    Statements like “Only the Sith ‘ are pretty absolute too.

    No they aren’t.

  55. jbc 55

    Isn’t it the case that if tenant’s liability was limited in law then insurance companies’ abilities to recover costs would be reduced so the result would simply be higher insurance premiums for landlords – which would ultimately be added to the cost of renting?

    Ultimately it’s the poor bugger at the bottom that will pay – either with or without limitation of liability.

  56. renee4tkc 56

    In my experience as a budget adviser some years ago;
    Tenants must have Contents Insurance to protect themselves from the sorts of damage done in the Dunedin case.
    Problem; most insurance co demanded that you also insured your car with them to qualify for contents insurance.
    They also usually set minimum values for household contents
    It’s expensive and often, the tenant/s don’t own a car. Have limited income. Can’t afford Contents Insurance.
    This is a lawchange that benefits insurance companies not landlords nor tenants…

  57. Jasper 57


    I used to work for IAG who underwrite a lot of policies, generally done through Banks.

    IAG has a contents insurance policy that is a minimum 10K, which works out at about $3.50 a week.
    Most students do have 10K of contents, without realising it – computer, clothes, ipod, phone, camera, sofa, microwave, fridge etc… what else have I forgotten.

    Under that contents policy, you had tenant insurance of 1million.

    Only downside to that policy is that the insurance companies end up going for the only responsible tenant who has contents cover.
    This happened to me when I was renting due to fire damage caused in the kitchen.
    However, $15K later, and able to prove I wasn’t in the property (out of the city even) I didn’t have to pay.

    It all depends on how clever clogs tenants are, and most aren’t. Unfortunately.

  58. Matthew Pilott 58

    JBC – the original amendment would increase cover Tenants had to that of their Landlord, as part of the Landlord’s cover. Premiums would probably increase, where such cover was not already in place, but the liability would rest where it should.

    I’d prefer a different solution, such as specifically removing such damage from lease agreements, but that would lead to problems in proving who was responsible for damages – i’m not sure if that’s a practical option or not, but it would negate the insurance issues.

    To put it simple, tenants would not be jointly and severally responsible for liability damages – they would be personally responsible. Thus liability would rest with those…liable!

  59. Redbaiter 59

    Dipshits leftist once again totally unable to grasp that there’s no free lunch. A landlord’s property gets wrecked, someone has to pay, and if you think that insurance means no renters have to pay then once again, you don’t have a fucken clue about economics.

    Where do you think landlords will seek to recover the cost of ever increasing insurance premiums??

    Leftist whine on/

    “I was out of town when the damage occurred it was my flatmates”

    Leftist whine off/

    Flat with some responsible people and not children then you dick.

  60. Pat 60

    MP said “I’d prefer a different solution, such as specifically removing such damage from lease agreements, but that would lead to problems in proving who was responsible for damages – i’m not sure if that’s a practical option or not, but it would negate the insurance issues.

    To put it simple, tenants would not be jointly and severally responsible for liability damages – they would be personally responsible. Thus liability would rest with those liable!”

    So in that case, the onus would be on the landlord and/or his insurance company to prove which particular tenant was at the party. Can you see some inherent difficulty in this?

    Furthermore, is that fair on the landlord? The house is trashed and he may be facing a Kahui-like code of silence and denial.

  61. Pat 61

    By the way, I’m copywriting the “Kahui-like code of silence” phrase, before all the link whores among you scuttle off home to your own blogsites.


  62. Matthew Pilott 62

    Yes Pat, I can! But this is common practice in insurance claims. What you’ve suggested is wrong can actually be seen as ‘guilty unless proven innocent’. Can you see the inherent flaw in that?

    Edit: Pat, you know that the onus is not on the Landlord, but the insurance company, which makes a profit out of taking such risks. The Landlord will be fine, unless they have no insurance. The ‘code of silence’ (like the phrase btw) is probably a fairly unique problem, given the abberation of responsibility that is presented by the type of lease.

    Redbaiter – where are your standards? Your flatmate is a screw-up so it becomes your responsibility? It’s a little known fact that the Right hasn’t got a monopoly on Personal Responsibility – but it’s a joke for you of all people to argue against it.

  63. Alex 63

    “landlord’s property gets wrecked, someone has to pay”

    clearly regardless of who does the damage it should be a person who had nothing to do with it PERSONAL RESPONSIBILITY rite

  64. MikeE 64

    If you are on the lease, i.e. head tenant, then it *should* be your responsibiilty to ensure your flatmates aren’t complete idiots.

    Can’t keep them under control. Then keep them out of my house.


    It should not be the landlords problem if you are flatting with irresponsible idiots.

  65. Matthew Pilott 65

    head tenant, then it *should* be your responsibiilty to ensure your flatmates aren’t complete idiots.

    There is no head tenant. Jointly and severally. So you believe you should be directly responsible for the actions of your flatmates, and them for yours. That seems at odds with what I’d expect from you, MikeE.

    I reckon love of property rights is clouding some peoples’ belief in personal responsibility – and I must say it’s telling to see property rights trumping personal/human rights from the Right crowd!

  66. Alex 66

    “If you are on the lease, i.e. head tenant, then it *should* be your responsibiilty to ensure your flatmates aren’t complete idiots.

    Can’t keep them under control. Then keep them out of my house.


    It should not be the landlords problem if you are flatting with irresponsible idiots.”

    What Matthew Pilott said, and also that just because there are people living in a house without a written tenancy agreement doesn’t mean there is no tenancy agreement – it can be implied. You start getting into pretty awkward law, though.

  67. Lew 67

    But Red,

    Flat with some responsible people and not children then you dick.

    Surely you aren’t suggesting that someone should take responsibility for the failings of others, and by their good sense shelter their flatmates for their misfortune? Surely we should be free to flat with whom we like, and not have their failings visited upon us?

    Say it ain’t so!


  68. Matthew Pilott 68

    Say it ain’t so!

    I know. As said, seems Landlord Property Rights supersede those of the Individual.

    Turns out it’s not about Rights, It’s all about the Benjamins

  69. jimbo 69

    This isn’t about “tenant rights”, it’s about allocation of risk.

    If I own a house and I burn it down (or my lodger, neighbour or anyone else burns it down), then I’ll have to stump up the money and fix the house. The way I re-allocate my risk is to take out insurance. I can recover my losses by suing the person responsible for causing my damage.

    If I rent a house, why should my position be any “better” than if I owned the house myself. Why should I get extra protection regarding damage to the house that would not be available to me if I owned it, rather than rented it?

    If a renter is worried about damage to the house they live in, they should (a) modify their behaviour to decrease the chance of damage, and (b) take out insurance. The renter, not the landlord, is the person who occupies the property and who can check to make sure the oven is off, keep Headhunters gang members out, lock doors properly, etc.

    Putting in caps on tenants’ liability at the comically low level of 1 month’s rent would totally encourage reckless (and willfully damaging) behaviour. If you damage your own property (whether an accident, intentional or stupidity), then the fact of the matter is you’ve lost money and you’ll be worse off than you were before the event. NO law can ever change this!

    It is a fundamental truth that allocation of risk affects price. Any law that simply switches more risk from tenant to landlord will, without one shadow of a doubt, result is two things (1) higher rents than would have been the case without the law, and (2) more restrictive terms in leases (e.g. limiting the number of people who can be in the property at any one time).

  70. Pat 70

    There needs to be some clarification about the insurance aspect.

    Obviously landlords have a home and (limited) content insurance on their properties. But these policies do not cover malicious damage by a tenant. For that you need a separate Landlords Protection Policy.

    In my experience financing Mum and Dad property investors, the vast majority do not have Landlords Protection Insurance (rightly or wrongly).

    So it is not as simple as assuming insurance will always cover the damage.

  71. Alex 71

    “f I own a house and I burn it down”

    That’s right, if YOU burn it down. Not if someone else does it and you have no control over it – which is what the argument has been about the whole time. Under Labour’s bill tenants would still be liable if they caused damage “recklessly or intentionally” (for reference: http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10557533)

    “A month’s rent would have been the maximum penalty for any damage if the Tenancy Tribunal or a court decided the tenant did not cause it intentionally or recklessly. This was proposed after a tenant was held responsible for the actions of a flatmate in causing a Dunedin house fire.”

  72. Pascal's bookie 72

    The Labour party legislation wouldn’t have protected tenants from paying for ‘malicious damage’.
    From the Herald:

    (Labour’s) …proposal was to cap financial liability for property damage to four weeks’ rent, a move of great concern to landlords.

    A month’s rent would have been the maximum penalty for any damage if the Tenancy Tribunal or a court decided the tenant did not cause it intentionally or recklessly.

    (emphasis mine)

    It was solely about protecting tenants from paying for damage that was none of their doing. The aim, I assume, would be to make insurance wallahs go after culprits rather than convenient others…

    Edit: Alex, snap.

  73. Steve 73

    Am glad that the government is looking at the provisions relating to tenants liability as Labour’s went too far. My only problem is with the all liable even where it is clear you had nothing to do with it. If liability can be established against someone – in the Dunedin case the frier, the others shouldn’t have to fork out, however where no clear liability exists then all liable is fair.

    If people want to take the risk of not having personal liability while renting, that’s fine, but if the sh*t hits the fan, they made the choice..

  74. jimbo 74


    You’re missing the point. If I own and occupy a house, and the house gets damaged “on my watch”, I have a problem to deal with (even if the damage was not my “fault”).

    In a lease, the house gets handed over to someone else lock, stock and barrell. The tenant gets posession of the house and the landlord has very limited rights of supervision.

    The tenant WANTS to take on the benefits of living in a house. One of the responsibilities of living in that house is protecting it against damage (not just “don’t brun it down yourself”).

    So again I say, if the house gets damaged “on the tenant’s watch”, why is it unreasonable for them to bear the costs? If the tenants believe that someone else is responsible, the tenants can “go after” that person.

    In life, accidents happen, things get broken, damage occurs. At some point, you have to answer the question “Who pays for this accident?”. Normally, society answers that question with “The person who was best-placed to stop the accident occurring”. For a rental property, the occupiers are clearly best-placed to stop accidents occurring, are they not?

    If you cap the tenant’s liability (i.e. if you force the landlord to take on additional liability exposure and risk), the you will simply increase the costs of renting (all other things being equal).

    Certainly support Labour’s approach if you like, just don’t get angry when you find rents increasing and lease terms becoming more onerous. As I said before, rent rises and harsher lease terms would be inevitable.

  75. jimbo 75


    “Intentionally” or “recklessly” are very high standards, way higher than negligence.

    If a tenant is negligent in the way they look after a property, their liability should not be arbitrarily capped with the costs foisted onto the landlord.

  76. PK 76

    Having been both a tenant and a landlord I’ve had one “bad’ landlord and 2 “bad’ tenants – not statistical more to make the point I’ve seen both sides.

    ALL my other landlords and tenants were pretty good. The evil landlord was a lawyer interestingly enough. The law protected me quite well against the bad landlord as I bothered to check and the Tenancy boys were very helpful. Mind you, he still was a pain and I was glad to move away.

    As a landlord I had no real recourse against the bad tenants and also had significant extra liabilities even with insurance. The insurance company wouldn’t even insure certain types of tenancy or of ANY visitors (invited or not) to the property’s behaviour.

    I also had the case where the person’s name on the agreement got done over by fellow tenants and they were then liable for a bunch of damage. I didn’t get any recompense as the head tenant hadn’t any money. I had no recourse other than to sue the head tenant and they had to then sue the other tenants. This was not going to happen and I also felt it would be an act of malice to bankrupt the tenant despite their actions as they had brought in fellow tenants who were obviously unsuitable and I had warned the tenant of my concerns at the time. The agreement was phrased in such a way that the tenant could sub-let.

    The other bad case was a bit similar in that I ended up out of pocket. I spoke to the Tenancy people who informed me that I would be unlikely to get more than the bond, which I had to work very hard to get and that nowhere covered the costs. The second case was deliberate. The Tenancy people were very helpful here as well. They do a good job in my experience.

    I am no longer a landlord. It made me money, so no complaints there, except having done the sums I reckon there are less painful and risky way ways to invest.

    As part of being a landlord I talked to a lot of other landlords and all have various horror stories but the horror stories tended to happen a lot more and were worse at the cheap and nasty end of the market. These were often poor quality housing, not well maintained etc with tenants who would fit the same description.

    In terms of liability if you rent a car then you are then responsible for the car under law. I don’t see a difference here. I suggest there should be regulations around compulsory insurance to cover tenants’ liabilities.

  77. jimbo 77

    Alex – GREAT selective quoting of me as well. Seriously, why bother if you’re gonna cut something totally change the meaning…?

    As I said, if I own and occupy a house, I have a problem no matter who burns it down and irrespective of whether it’s my fault or someone else’s.

    If I lease my house to you and you occupy it, I want you to take on board ALL those risks because you are the person best-place to deal with them (not just some of them and not capped at 1 month’s rent).

    If you don’t want to take on all those risks, fine. I will have to raise my price (the rent) to compensate me for keeping certain risks and I’ll go spend the extra rent on more insurance.

    NO government policy can magically change the relationship between risk and price…

    Let’s face it, you basically want landlords to pay because they are “richer”.

  78. mike 78

    Great stuff Nats – this is the sort of thing I voted for.
    Why should the tax payer fork out to represent tenants and the landlords go into his own pocket.
    Landlords are ordinary working kiwi’s just trying to get ahead

  79. Pascal's bookie 79

    Jimbo, Landlords are not doing tenants favours, loaning them a house in return for a bit of dosh. It is a business, and the tenant is the customer. The landlord gets rent which often enables them to buy a property, gaining full rights of ownership, with someone else’s money. In return they wear some risks. Which they can insure against.

  80. Draco T Bastard 80


    How can landlords and tenants be equal before the law?

    They can’t simply because the tenants can’t afford lawyers.

  81. Akldnut 81

    If I ever become a tenant again (quite feasible) I hope I won’t be held accountable when hoodlums break in (extremely feasible) ransack the house and put holes in the walls. (quite feasible)

  82. jimbo 82

    PB – I agree with you that “landlords aren’t doing favours”. What landlords do is take risks to try and make money. Bearing that in mind, landlords won’t simply roll over and accept increased risk as a favour to tenants out there. If a capping policy were put in place, rents would DEFINITELY rise for ALL tenants and rental terms would probably get more severe.

    It’s a well-meaning idea to “cap” tenants’ liability, it just won’t get the desired result. I don”t like the policy because it hasn’t been properly thought through.

    To deal with the “liable but not my fault” issue, a far better government response would be to work with insurance companies to make sure there is a product out there for tenants that would protect them against third parties doing damage to the property they occupy. Then if you educate tenants about that product, and the risks they face if they chose not to insure, you’ll have tenants who can decide whether to (1) take extra care of the house they’re in; or (2) buy the insurance. CHOICE will remain with the tenant. Careful tenants will continue to profit by effectively self-insuring (i.e. keeping the risk). Irresponsible tenants will at least have been reminded about the potential consequences of their behaviour.

    The policy I describe above would “work”. It would incentivize tenants to keep undesirables out of the house.

    As I said above, risk doesn’t bother landlords as long it gets priced properly. Give the landlord more risk, expect the price to go up.

  83. vto 83

    rave, that is the most coherent ever. It almost makes complete sense.

  84. pk 84

    Akldnut – but if you rent a car (quite feasible) and someone steals it (quite feasible) and sets fire to it (quite feasible) you would be held responsible\accountable. It’s in your care.

    If you rent a DVD …… etc

  85. Pascal's bookie 85

    The price certainly reflects risk jimbo. But nowhere like as hard and fast as you are sugesting. Rent is mostly determined by the market. This cost plus menatlity you are arguing may be fine for some point of argument, but in the real world the rent will be set by what tenants are prepared to pay. If that’s not enough to satisfy an individual landlords risk toleration, they’ll sell to landlords that can meet the market price. If what you are saying is true, landlords having problems letting a property at a set price, would never drop that price to help. And yet they do, all the time.

  86. Alex 86


    The bill would NOT have shifted all risk onto the landlord. It would simply have moved liability to the person who caused the damage, rather than onto all tenants no matter who was responsible.

    Most tenants (or even landlords) are not aware that they are liable for damage caused carelessly by one of their flatmates. I can’t put it as well as the judge in the Dunedin case, so here’s what he said:

    “Where tenants are not insured, they often have too few resources to be worth suing and are not sued for that pragmatic reason. Where not all joint tenants are insured, a claim may be brought against all to recover from the tenants who are insured. Whatever the situation, the entry of judgment against tenants is usually unjust because insurance premiums are factored into landlords’ costs when fixing rents and they are effectively paid by the tenants (emphasis mine). I note also that insurers accept the risk of leased residential properties knowing that tenants are unlikely to have liability insurance or other means to pay claims and that the recovery of substantial contribution to the insured loss from tenants must be relatively uncommon (emphasis mine). Putting aside these variables, I am of the opinion that, in general, the pursuit of substantial claims against tenants with respect to damage caused carelessly is oppressive in effect and I respectfully urge that the law be reformed.”

    – Harrison v Shields, 25/9/02, District Court Dunedin, Judge MacAskill, NP435/00

    The reality is tenants do not have the means to pay any substantial amount to a landlord or insurance company. They already effectively pay for the landlord’s insurance. MacAskill goes onto say a simple solution would be a change to the Residential Tenancies Act to require landlords to insure the interests of the tenants, unless the damage had been caused intentionally or carelessly. He notes that premiums would go up, but that the cost could simply be passed onto the tenants (which is what already happens).

    Given that landlords take on insurance it’s obvious they are assuming risk of damage outside the control of the tenants (i.e. not caused carelessly or intentionally). If the landlord him/herself lived in the property their insurance would cover them for damage they did not cause carelessly or intentionally. What you are arguing for, effectively, is that insurance companies have the right to sue tenants for damage they did not cause even though this would not happen were it the owner living in the house, and even though they understand the risk they are taking on when they insure a leased property (i.e. that it is unlikely they will be able to recover any money from the tenants). It’s an unfair loophole in the law.

    I hope my html stuff worked out properly and that this doesn’t look stupid.

  87. Alex 87

    “(i.e. not caused carelessly or intentionally)”

    This should be “recklessly” rather than carelessly, which is what Labour’s bill said.

  88. jimbo 88

    Alex / PB,

    Certainly don’t 100% disagree with what you’re saying. Yes landlors “meet the market” and individual landlords will always lower price to fill one empty flat. That’s looking at it at the microeconomic level.

    Stepping back though, if you pass this “capping liability” provision, you have just reduced the returns on the entire “landlording” industry. Which rents are most likely to increase? Not wealthy suburbs where the risk of tenants’ guests punching a hole in the wall in low, but “marginal” suburbs with poorer tenants and gangs sniffing around.

    Why? Two reasons – (1) you’ve transferred to the landlord (rather than the tenant) the responsibility (and cost) of effecting recovery from the “person who was responsible for the damage” (and let’s be honest, in most cases that person is a licensee of the tenant – i.e. the tenant INVITED that person into the relevant property). (2) you’ve taken some of “risk” of looking after the property away from tenants, meaning that there will likely be more damage to properties than there was before.

    Landlords have to deal with these increased risks/costs now. Yes, some will simply take out more insurance (cost increase). Others will do more inspections or change the terms of their leases (time commitment). But for the same number of landlords to stay involved in the industry, the income component (i.e. gross rent) needs to rise across the board, or else some landlords will simply quit and put their money in other investments.

    My main objections to the policy are that it “does not work” as described above. I also don’t like it because the cap was comically low, which makes me suspect it was a policitally motivated stunt. A 1 month cap is just removed from reality and would drive all the wrong behaviours. In a furnished flat that might cover the cost of the oven, perhaps…?!

    What happens if you pass this policy? Again, people “on the margins” suffer. Wealthy landlords simply shrug, take out a bit more insurance, ask their property managers to raise the rent by $10 a week, tell their property managers to do more detailed background checks. Maybe they take a bit more time to fill vacant properties because they’d rather have a tenant who is a teacher/lawyer rather than mechanic (or whatever).

    Meanwhile, tenant who is well behaved but without prestigious job title, struggling to afford the rent anyway, living in poorer part of town, gets hit with increased rent and/or passed over for the vacant property because landlords are minimizing their exposure by only looking for certain types of tenants.

    Who wins the most? the plonkers who invite lunatics into their landlord’s house…!

    In summary – too many unintended consequences from a policy designed to *help* the wrong people….

  89. jimbo 89

    Alex – also, I simply disagree with the way the Judge has cast around the word “unjust”.

    If I invite someone into my rented property and they damage or destroy it, perhaps I should not be exposed to 100% of the liability. Perhaps my exposure should be capped at 50% of the damage he causes (or whatever). It should probably depend on the circumstances – inviting a priest into the house might be different from inviting 10 headhunters in for a party…

    But if the typical yeild on a house is around 6% and the policy suggests a cap of 1 month’s rent FOR ALL CASES (i.e 0.5% of the property value), that is a ridiculous allocation. If I knowingly invite in the headhunters, why should my responsibility be assessed at 1/2 a percent of the house value?

    That will DEFINITELY drive the wrong sort of behaviour.

    Finally, the policy wasn’t just about 3rd party damage (as per the Dunedin case), it was about any damage that was not caused by my recklessness or wilfull default. That’s also crazy and will drive the wrong behaviours.

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