Residential Tenancies Amendment Bill (No 2)

7 New sections 49A to 49E and cross-heading inserted

After section 49, insert:

Responsibility for damage

49A General principle: tenant not liable

(1)

Except as provided in section 49B, a tenant has no liability or obligation, and must not be required, to—

(a)

meet the cost of making good any destruction of, or damage to, the premises; or

(b)

indemnify the landlord against the cost of making good the destruction or damage; or

(c)

pay damages related to the destruction or damage; or

(d)

carry out any works to make good the destruction or damage.

(2)

A tenant is not, in any case, liable for fair wear and tear.

49B When tenant liable

(1)

A tenant is not excused from liability or obligation by section 49A(1) if, and to the extent that,—

(a)

the destruction or damage was intentionally done or caused by the tenant or by a person for whose actions the tenant is responsible under section 41 or 66L; or

(b)

the destruction or damage was the result of an act or omission by the tenant or by a person for whose actions the tenant is responsible under section 41 or 66L and the act or omission occurred on or about the premises and constitutes an imprisonable offence; or

(c)

any insurance moneys that would otherwise have been payable because of the destruction or damage are irrecoverable because of an act or omission of the tenant or of a person for whose actions the tenant is responsible under section 41 or 66L.

(2)

To the extent provided in subsection (3), the tenant is liable to the landlord for destruction of, or damage to, the premises that is caused by a careless act or omission of the tenant or of a person for whose actions the tenant is responsible under section 41 or 66L, other than an act or omission described in subsection (1).

(3)

The tenant’s liability under subsection (2) is limited, for each incident,

(a)

if the property is insured by the landlord against the destruction or damage, to the lesser of the applicable excess under the insurance and whichever of the following is applicable:

(i)

if the tenant pays an income-related rent within the meaning of section 2(1) of the Housing Restructuring and Tenancy Matters Act 1992, the market rent within the meaning of section 2(1) of that Act for the premises for a period of 4 weeks:

(ii)

in any other case, the rent under the tenancy agreement for a period of 4 weeks; or

(b)

otherwise, to whichever of the following is applicable:

(i)

if the tenant pays an income-related rent within the meaning of section 2(1) of the Housing Restructuring and Tenancy Matters Act 1992, the market rent within the meaning of section 2(1) of that Act for the premises for a period of 4 weeks:

(ii)

in any other case, the rent under the tenancy agreement for a period of 4 weeks.

(4)

To avoid doubt, a tenant’s liability under subsection (2) may, if the tenancy agreement so provides or the tenant and landlord so agree, be satisfied by the tenant carrying out works to make good the destruction or damage up to a value of the liability limit in subsection (3).

(5)

Unless the damage is the result of an action described in subsection (1), a tenant’s obligations under section 42(6) (removal of a fixture) to repair damage or to compensate the landlord for expenses incurred in repairing damage are limited to work of a value, or payment of an amount, up to the liability limit set out in subsection (3).

(6)

Destruction or damage of which the landlord becomes aware after this section comes into force is presumed to have occurred after this section came into force unless the tenant proves otherwise.

(7)

If any destruction of, or damage to, the premises is proved to have occurred during any tenancy to which this Act applies,

(a)

it is for the landlord to prove

(i)

that any damage is not fair wear and tear; and

(ii)

that any destruction or damage occurred in circumstances described in subsection (1)(b); and

(iii)

that any insurance moneys are irrecoverable for the reasons described in subsection (1)(c); and

(b)

it is for the tenant to prove

(i)

that any destruction or damage was not intentionally done or caused as described in subsection (1)(a); and

(ii)

that any destruction or damage was not caused by a careless act or omission described in subsection (2).

49C Landlord, not insurer, to benefit from tenant liability for careless damage

(1)

An insurer of the premises against destruction or damage has no right or claim in relation to a tenant’s liability under section 49B(2) or (5), including no right of equitable or contractual subrogation and no right arising out of an assignment by the insured.

(2)

If an insured receives or is entitled to receive any money or benefit arising out of a tenant’s liability under section 49B(2) or (5), an insurer of the premises may not take that money or benefit into account in calculating the amount payable under the insurance.

49D Unlawful acts related to liability

It is declared to be an unlawful act for a landlord—

(a)

to demand, request, or accept from the tenant—

(i)

payment of an amount related to destruction of, or damage to, the premises that exceeds the tenant’s liability in accordance with section 49B; or

(ii)

the carrying out of any works to make good destruction of, or damage to, the premises the value of which exceeds the tenant’s liability in accordance with section 49B:

(b)

to propose to, or enter into with, the tenant an agreement under which the tenant is obligated—

(i)

to pay an amount related to destruction of, or damage to, the premises that exceeds the tenant’s liability under section 49B; or

(ii)

to carry out any works to make good the destruction or damage if the value of the works exceeds the tenant’s liability under section 49B.

49E Meaning of premises

In sections 49A to 49D, unless the context otherwise requires, premises includes facilities.