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Personal properties vs chattels

Tuesday, January 19, 2021

In an $11,476.87 order made against the tenant, Kieran Jie-Wei Cheng, that in part, penalised him for damaging the premises, the Tribunal clearly articulates the limits of its jurisdiction. In short, personal properties belonging to the landlord do not enjoy the same s49B protection against tenant damages as rental chattels otherwise would.

 

RE: Newman v Lalor and other parties [2021] NZTT Christchurch 4278015, 4282792


Facts
  • Mr Cheng along with others rented a property from and signed separate agreements with Mr Newman.
  • At the end of the tenancy, rent was owing, the property was substantially damaged and several chattels were either damaged or missing.
  • The landlord made his claims specifically against Mr Cheng.

Note: This digest is only concerned with claims relating to damages to and missing chattels and personal properties.

The law

The adjudicator outlines the general steps the Tribunal goes through to adjudge liability when it comes to damages to the premises made after 27 August 2019 (s49B):

  1. The landlord establishes that damage to the premises occurred during the tenancy and that it is more wear and tear.
  2. The tenant to prove that he did not carelessly or intentionally cause or permit the damage to avoid liability.
  3. If the tenant was careless and the damage is covered by the landlord’s insurance then the tenant is to pay the lesser of the insurance excess or four weeks’ rent.
  4. If the tenant was careless but the damage is not covered by the landlord’s insurance then the tenant is to pay the landlord four weeks’ rent.
  5. If the tenant intentionally caused the damage then he is liable for the cost of repair/replacement.

The rules of damages extend also to facilities/chattels (s49E). Facilities are specifically defined by the Act. For the purpose of this digest, they can be broadly understood as chattels that form part of the tenancy.

 

Outcome

The landlord was successful with all the claims relating to chattels that were provided to the tenant’s use as part of the tenancy. However, the adjudicator declined to award any compensation for missing and damaged personal properties that were left at the premises stating that ‘… [they] were the landlord’s personal property and they were not chattels provided for the tenant’s use. They were not therefore part of the tenancy and the loss of and damage to the items is a personal issue between the landlord and Mr Cheng. The Tribunal does not have jurisdiction to adjudicate on such claims.

Though the adjudicator does not reference s49E, the section explicitly states that the provisions for tenant’s liability to damages are limited only to the premises and its facilities.

 

Take-home for landlords

It is not uncommon for landlords to store personal belongings at a rental property. And when these items are left at the premises in a way that makes them easily accessible to tenants, it is hardly surprising that, over time, tenants could confuse them with chattels that form part of the tenancy.

We recommend landlords to consider taking some or all of the following steps to preserve and protect personal properties left at the premises:

  1. That appropriate insurance be in place for these items and that landlords explore with their insurance companies ways to store and secure them;
  2. That the items be stored securely in areas that the tenant have no access to;
  3. That landlords clearly document and communicate with the tenant about any personal belongings that are not part of the tenancy;
  4. That tenants be given the opportunity to request that these items be either removed or give input as to the best ways for storage; and
  5. That every property inspection visit includes a stocktake of personal belongings left at the premises and any issues to be addressed as soon as they are discovered.

 

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