Following the recent Court of Appeal decision on Holler & Rouse v Osaki,
the Tenancy Tribunal prepared Practice Note 2016/1 outlining,
to its adjudicators, how applications relating to tenant liability for damages are to be treated from 1st August 2016.
As an aside: For those who are unfamiliar with Holler, the case hinged on whether a residential tenant would be protected by the exoneration clauses
(ss 268-269) in Part 4 of the Property Laws Act. The sections mandate that where damage occurs (that that landlord is insured for), the tenant/lessee
cannot be required the meet the costs of repair. The exceptions to this general rule are 1) where the damage was caused intentionally; 2) where
the damage is a result of an imprisonable offence; or 3) if the tenant acts or omits to act thereby preventing insurance funds arising from the damage
from being paid to the landlord. Previous to Holler, the presumption was that ss268-269 only applied to commercial leases. But
not anymore. Holler is significant insofar as declaring that residential tenants now enjoy the benefits of their landlords’ insurance
policies in the same manner as their commercial counterparts do and have been enjoying since 2007.
Needless to say, this is an alarming development tipping the balance of residential tenancy laws in this country to favour tenants even more. To
give tenants exclusive possession (and therefore full control of how the properties are being used) but not financially disincentivise them when they
fail to be responsible is tantamount to arming a child with a livewire and a lighter and shrugging your shoulders when the bomb goes off. It
seems that Holler has created a fundamentally inequitable disjunction between the ability to control (whether...
