In my previous blog (see my previous blog article, Osaki Case Appeal Ruling), I described the potential implications of the Appeal Court on the Osaki case when it upheld the claim that a landlord’s insurer cannot recover the cost of damage to a property caused by a tenant in a residential situation.

The Tenancy Tribunal has now prepared a Practice Note 2016/1 which outlines how applications to the Tribunal by landlords claiming damages compensation from the tenant where damage to their property that is more than ‘fair wear and tear’, are to be addressed.

To read the Tenancy Tribunal Practice Note 2016/1 please see here: Practice Note 2016/1.

Tenants exonerated for damages

The basic premise of the Tenancy Tribunal is that if damage that exceeds fair wear and tear can be
shown by the tenant to be a result of carelessness and not caused intentionally, and if the landlord
has insurance for the event that caused the damage, the tenant is not liable to pay for the damage.

Furthermore, if the damage is caused by one of the events referred to in s. 268(1)(a) of the Property
Law Act 2007 (PLA), namely fire, flood, explosion, lightning, storm, earthquake or volcanic activity,
the tenant is not liable to pay for the damage regardless of whether the landlord has insurance or
not, unless the landlord can establish that the damage was caused:

• intentionally,

• as a result of an imprisonable offence, or
• as a result of an action either by the tenant or tenant’s visitor that “caused the insurance moneys to be irrecoverable”.

Nightingales advice to landlords

This is clarification of a major development. We advise all our landlords to check their insurance policies and seek legal advice if necessary.

Where damage by tenants is intentional

Note that where damage is intentional, the tenant is not covered by the landlord’s insurance and
compensation may be awarded by an adjudicator according to the provisions of the Residential Tenancies Act 1986 (RTA).