New Zealand landlords concerned that tenants are intentionally destroying their investment properties can rest assured the chances of this happening are slim, according to new survey results.
However, landlords are still filling insurance claims for accidental damage to the property.
Almost 90% of the 500 landlords AA Insurance surveyed say they are concerned about tenants intentionally damaging their investment property. Their next greatest concern is the possibility of tenants missing rent payments (88%), followed by contamination of the property by consumption of illegal drugs (87%).
According to AA insurance, the most common type of landlord claim is for tenants’ accidental damage to the property, such as a hole in the wall or a stained carpet – not for any intentional damage. The average cost for insurance claims from landlords is $3000.
AA Insurance customer relations manager Amelia Macandrew says, while accidental loss and damage is more prevalent than intentional damage, it still pays to have the right insurance.
What are tenants concerns about investment properties?
AA Insurance also surveyed 500 tenants to get their concerns about rental properties. Perhaps unsurprisingly, the majority (72%) were concerned about rent increases happening more than once a year, as well as repairs not being done properly.
Other concerns include that:
- The landlord would refuse to conduct repairs without putting the rent up
- The repairs taking too long to be completed.
- There would be damage to their contents or health.
On 1 July, the Residential Tenancies Amendment Act came into force, which offers some protection for tenants’ health and wellbeing.
All landlords are now required to disclose in tenancy agreements the extent of insulation their rental property has. All rental properties must also have working smoke alarms.
Insurance policies unlikely to cover house contamination from drugs
Most house contents insurance policies do not cover contamination from illegal drugs, so it is important to do your due diligence about rentals or the home you’re moving into, Ms Macandrew says.
Warnings over P (methamphetamine) contaminated houses have made national headlines in New Zealand, with Housing New Zealand vacating and cleaning state properties which are believed to be contaminated.
The Ministry of Health’s guidelines for the remediation of houses where methamphetamine has been manufactured says 0.5 micrograms per 100 square centimetres is the “accepted” level of contamination.
However, some experts believe the risk of P contamination is being overstated and that current guidelines are being inaccurately applied to houses where P has been smoked, not manufactured.
Where can landlords and tenants get more support?
Landlords and tenants can get more support from a variety of online resources, including Government guides.
The New Zealand Government provides a guide to help landlords work out what they need to consider when they rent out property, including sorting tenancy agreements, and your rights and responsibilities as a tenant.
Tenants can refer to the Government’s Tenancy Services website for guidance about their legal rights, and to understand their landlords’ obligations around rent increases and providing healthy homes free from contamination.