Faafoi KrisRESIDENTIAL TENANCIES AMENDMENT BILL (NO 2)In CommitteePart 1 Amendments relating to tenant liability and premises unlawful for residential use Hon KRIS FAAFOI (Associate Minister of Housing (Public Housing)): It's a pleasure to speak in this Part 1 debate on the Residential Tenancies Amendment Bill (No 2). This is a technical bill and it deals with quite a lot of the minutiae that is between both a tenant and a landlord especially in this case in Part 1 when we're talking about liability for damage that is done to a rental property. The bill and Part 1 specifically aims to clarify that law in respect of tenant liability for damage and secondly in Part 1 it also looks to make sure that the Residential Tenancies Act applies to all premises intended for residential use even if they are for unlawful residential purposes. Part 2 and we'll get on to that speaks to contaminants and methamphetamine but I'm sure we'll get to that at some stage. Just speaking again to the tenant liability portion of Part 1 the bill clarifies liability for careless damage to rental properties. I understand that this came about because of a Court of Appeal decision in 2016 which I believe has become known as Osaki where the Court of Appeal ruled that tenants are immune from a claim by the landlord for damage caused carelessly or negligently by the tenant or a tenant's guest under sections 268 and 269 of the Property Law Act and as a result of that ruling by the Court of Appeal landlords are now bearing most of the costs of tenants' careless damage including insurance excess payments. This bill and the liability settings in this bill strike a balance between keeping landlords' costs neutral as much as possible under this bill incentivising tenants to take care of rental properties and protecting tenants from excessive risks and costs and the provisions in Part 1 should go to encourage cost-effective insurance arrangements. Under the bill a tenant is liable for destruction or damage caused by a careless act or an omission of the tenant or someone that the tenant is responsible for up to the value of the landlord's insurance excess if they have an insurance policy but not more than four weeks' rent. Public housing tenants are liable for up to four weeks' market rent not the income-related rent subsidy (IRRS) that they pay if they do. Obviously this is because the IRRS fluctuates depending on the employment of the tenant and the income status of a tenant which would make it difficult to quantify what the liability around four weeks would be. Tenants will also remain liable and no cap will apply for intentional damage or damage caused by an act or omission that constitutes an imprisonable offence and I think that goes without saying.There are also obligations on landlords as a result of Part 1 in terms of the liability around tenancy agreements. Landlords are required to inform tenants in new tenancy agreements if their premises are uninsured and if the premises are insured the amount of each relevant excess for each policy that may pertain to the property and a tenant. And they must inform the tenant that a copy of the policy is available to that tenant upon request unless the landlord has already provided the insurance policy to the tenant. Also a landlord must provide a tenant who requests it with a copy of the relevant insurance policy. Or if policies of more than one are relevant to the tenant around damage and liability obviously they will have to supply that.In the select committee process submitters pointed out that tenants do have a right to know the level of their liability for careless damage and the bill continues the current situation in barring insurance companies from exercising rights of subrogation in relation to a tenant's liability for careless damage if covered by insurance. That covers the tenant liability parts of Part 1 of this bill. There are also as I mentioned earlier in my contribution some parts around unlawful residential premises which I think I'll get to at some stage but I'm sure there'll be some contributions in terms of tenant liability that the committee would want to hear.