Less than one month in, the Holler Practice Note is already causing ripples in the property industry. Anecdotally
we are aware of several Tribunal adjudications absolving tenants of any responsibilities as to damages to the property. Since Holler goes
into the heart of the insurer’s right of subrogation, many landlords will be asking What does that mean to my insurance coverage?
Related article: Holler practice note changes the rules of damage claims to the Tribunal
Firstly, it should be pointed out that the Holler approach is not new to the insurance industry. Under the Property Law Act (Part 4), insurance
details and arrangements are standard provisions in a commercial lease. Before Holler, the presumption was that the principles of Part
4 have no effect on residential leases. Holler changed all that. But PLA and residential tenancies form an uncomfortable
alliance, ‘in our experience,’ says Gary van Zijl, Business Manager of Initio Online Insurance,
‘commercial agreements tend to operate very differently to their residential counterparts.’ Thrusting a well-practiced commercial principle onto
a residential business framework does not produce an equitable outcome at all. While commercial landlords can financially redress the effects
of the PLA, the Residential Tenancies Act does not give residential landlords the same luxury.
For now, residential landlords should brace ourselves for the following effects Holler has on the way we do business:
1. Insurance Premiums
it means that once an insurance claim has been paid out, the insurer no longer has the right to recover any of the costs from the tenants (who caused
the damage...
