Government signalling partial reversal of Holler v Osaki

For some months, the New Zealand Property Investors’ Federation (the NZPIF), the Tenancy Tribunal and other key tenancy organisations have been in dialogue with the government as well as major party leaders to give feedback on how Holler v Osaki affects
the landscape of residential tenancies in New Zealand.  Legitimate concerns have been raised by these groups that Holler has the effects
of increasing costs, raising rent, encouraging profiling and discrimination, devolving tenant responsibility, increasing landlord intrusion and hampering
the Tribunal’s function to arbitrate tenancy disputes efficiently.   

Over the weekend at the New Zealand Property Investors’ Federation annual Conference, Housing Minister Dr. Nick Smith announced the government’s plan to
change the Residential Tenancies Act in order to (partially) counter the effects of Holler v Osaki:

“This review has been prompted by recent court decisions and Tenancy Tribunal rulings, which have sparked confusion over how the Residential Tenancy Act (1986) and the Property Law Act (2007) interact. This is resulting in uncertainty for landlords and tenants, and is affecting the effective functioning of the Tenancy Tribunal.

“The issue is tenant damage to a property through carelessness or negligence. The latest court rulings mean landlords cannot recover the costs of this damage where they have insurance, including for their costs such as the excess. The problem with this approach is that it reduces the incentive for tenants to take good care of the property they rent. It also reduces the landlord’s incentive to have insurance as it lessens tenants’ responsibilities.

“My concern about this new interpretation is that it will add to the overall costs of the residential sector, driving up insurance costs and rents. However, we do not...