A group of friends had been flatting together for a few years. During a recent inspection their landlord discovered that the tenants had been manufacturing methamphetamine in the flat. The tenants were evicted and the landlord is now seeking compensation from them to pay for the damage caused to the flat.

Can a landlord claim compensation for damage from their tenant?

In order to claim compensation for damage from a tenant, a landlord must establish that the damage to the rental property occurred during the tenancy, and is more than fair wear and tear.

When will a tenant be liable?

A tenant will be liable for intentional damage done by them or a person they allowed onto the property.

However a tenant will not be liable for damage if they can prove that it was not intentionally caused by them or a person they allowed onto the property.

Landlord insurance – does this cover damage that is careless but not intentional?

Significantly, where a tenant or someone they allowed on to the property has intentionally damaged the property, this will not be covered by the landlord’s insurance.

The landlord must disclose to the tenant whether or not any careless (but not intentional) damage is covered by their insurance.  If it is covered, the tenant is not required to:

  • pay for the damage;
  • pay for the excess of any insurance claim; or
  • repair the damage to the property.

What if the landlord does not have insurance?

If the landlord is not insured, they can apply to the Tenancy Tribunal for a work order, to assess whether the tenant can be made to remedy the careless (but not intentional) damage.

The group of friends who manufactured methamphetamine in their flat will most likely be liable to pay their landlord compensation because the damage is more than fair wear and tear and was done intentionally during their tenancy.

If you are a residential tenant or landlord and are concerned about damage to a rental property, you should talk to your legal advisor.

What if a landlord rents a methamphetamine contaminated property?

If a landlord rents a methamphetamine contaminated property (even unwittingly) the tenant can recover compensation from the landlord for any rental paid and any damage to the tenant’s property.   It pays to do a methamphetamine contamination test at the property regularly – at the start and end of each tenancy and during a tenancy if your tenancy agreement allows.

For more tips about keeping on top of your tenancy and avoiding potential problems, see ourchecklist.