18 May 2020

State housing tenants mistakenly told their homes are uninsured

5:48 pm on 18 May 2020

Housing development agency Kāinga Ora has apologised to tenants left confused and worried by a letter about their homes being uninsured.

More of the unoccupied state houses.

Tenants in housing owned by Kāinga Ora - Homes and Communities have been sent a confusing letter saying their homes are not insured - but they are. Photo: RNZ / Bradley Ambrose

The letter was recently sent to the government ministry's tenants, following last year's changes to the Residential Tenancies Act. This requires landlords to let their tenants know whether their home is insured.

Some tenants received a letter which said: "The home you rent is not insured. This means if you, or someone you are responsible for, carelessly cause damage to the property, the maximum amount you will have to pay per incident is 4 weeks' market rent.

"Remember if careless damage should happen, the maximum we can charge is 4 weeks' market rent for each incident.

"The full cost for any damage can be charged if: the damage is intentional, that is the damage has been done on purpose, or the damage occurs as a result of an imprisonable offence, meaning legal action could be taken."

A tenant approached RNZ concerned about what it meant for them and others.

Kāinga Ora deputy chief executive Paul Commons explained the homes were covered and the organisation should have communicated more clearly.

"We regret any confusion caused by this and are currently taking steps to remedy the situation."

He said the key issue was with the line "the home you rent is not insured". The letter was being re-written to better explain the situation and alleviate any concerns tenants may have.

Commons explained that it had two types of insurance for its homes.

"The vast majority are covered by our disaster insurance (earthquakes, flood, storms, for example), and when a property is affected by other types of damage, such as that caused by a fire, we cover the cost of this ourselves. Properties that are subject to body corporate management or which we lease from a private owner will have different insurance arrangements.

"We do not require tenants to take out insurance on their home - this is not their responsibility and, as mentioned, we cover costs that would otherwise be funded by a private insurer. However, we do encourage our customers to consider a policy for their contents."

Commons said last year's changes to the law benefited tenants as it capped the total amount they were liable to pay if their home was damaged.

"Previously, a tenant in any rental property... could be charged the entire repair amount, irrespective of any insurance policy. Now, the maximum a tenant would have to pay when their home is carelessly or accidentally damaged would be four weeks market rent, the insurance excess, or the cost to repair the damage, whichever is the lowest sum."

Commons said tenants were not responsible for repairs or damage from events such as burglaries, natural disasters or fair wear and tear.

Kāinga Ora had made about 54,000 phone calls to check on its tenants' well-being since lockdown began, he said.

These were to ensure the tenants had everything they needed to cope with the impact of Covid-19.

He encouraged tenants with concerns about their obligations as a tenant, the letter, or any other matter to get in touch on 0800 801 601 or to speak with their tenancy manager.

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