News

Update from the Department of Building & Housing

By Elizabeth Goulding

The Ministry of Business, Innovation and Employment (previously the Department of Building & Housing) has released it’s latest newsletter this week.  It included some interesting articles on debt collection and one of the latest Tenancy Tribunal decisions.

Debt Collection
The Courts and Criminal Matters Bill will amend a number of statutes and simplify debt collection and enforcement.

The Residential Tenancies Act 1986 and the District Courts Act 1947 will be amended to make attachment orders easier and faster to get.

An attachment order requires employers or the Ministry of Social Development to make regular deductions from the salaries or benefits of people who owe money, until their debt is fully paid. This is usually the most effective means of recovering the debt.

The most interesting thing to note is that the tenants must agree to this procedure during the Tribunal hearing.  This will obviously work fine if you are willing to let your tenant stay on however if you want the tenant to move out, the likelihood of the tenant agreeing to this decreases substantially.

Decision from the Tenancy Tribunal
A landlord sought compensation for the bedroom and lounge wallpaper that appeared to be damaged by the tenant’s son. This claim was dismissed as the Tribunal had to determine what had been lost and then put a financial figure on it.  To do this, the Tribunal needed to know the age and condition of the wallpaper.

This is because an injured party (in this case, the landlord) can be compensated, but cannot profit from another party’s (the tenant’s) default. This would constitute ‘betterment’ – where the replacement value of the wallpaper is more than the actual cost of the original.

The landlord accepted that there had been some peeling of the wallpaper that a previous tenant had fixed. The wallpaper was thought to be 9–10 years old – well above the estimated life expectancy of the wallpaper, which was 5–7 years. The condition of the wallpaper at the beginning of the tenancy was unknown. The Tribunal considered the damage to the wallpaper was due to fair wear and tear rather than damage caused intentionally or carelessly by the tenant.

Definitely something to bear in mind when renting out your property or thinking of seeking compensation for damages.

For more information or tips from the Ministry of Business, Innovation and Employment visit http://www.dbh.govt.nz/landlord-newsletter-23#aid3

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