Home Info Centre When does modification become damage?
When does modification become damage?
Protection

When does modification become damage?

22 Jul 2021 8 mins read

Changes to tenancy legislation in some states and territories has made it possible for tenants to make minor modifications to the rental property. But when does a modification become damage covered under a landlord insurance policy? We explain…

“Making the place our own” has long been the reason why tenants have sought to make changes to their rental property – things like putting up picture hooks to hang art, adding safety devices, painting or even planting a garden. Permission generally had to be sought for any kind of change at the property and landlords could decide if they would allow the modification to be made. But, recently, several states and territories have amended tenancy legislation to allow tenants to make minor modifications at the rental – either with the landlord’s consent (which they cannot unreasonably refuse) or even without consent, in some cases.

A quick summary

Queensland

Fixtures can only be added, and structural changes can only be made, with the property owner/manager’s written consent and they do not have to agree to the request if they give a good reason.

New South Wales

Tenants can make changes of a ‘minor nature’. Tenants can install fixtures or make alterations, additions or renovations if they have the landlord’s written consent, or if the tenancy agreement permits it. If the tenant’s request for a fixture or alteration, addition or renovation is of a ‘minor nature’ then the landlord must not unreasonably withhold consent.

Australian Capital Territory 

Tenants can make modifications with the landlord’s written permission. There are two categories of modification: general modification and special modifications. Special modifications include minor modifications and modifications for safety, security, disability, energy efficiency or telecommunications access. Landlords can refuse consent to special modifications (including minor modifications) only with the approval of the Tribunal. Landlords are able to refuse consent for general modifications, but they must not refuse consent unreasonably.

Victoria

Tenants can make modifications to the property. Some changes do not require landlord consent, including some child safety measures, picture hooks (so long as the property is not heritage-listed) or temporary window treatments such as curtains. Reasonable changes do require permission, but the landlord cannot refuse permission without a good reason.

Tasmania

Tenants cannot make any alterations or additions, or add fixtures, without the written permission of the owner. 

South Australia

Tenants cannot alter or add to a property without the landlord's consent. A landlord cannot unreasonably withhold consent for a tenant to make changes that support services such as digital television and internet access.

Western Australia

Tenants require landlord permission to make any modifications. Legislation is currently under review which includes provision to allow minor modifications to be made.

Northern Territory

There is no provision for modifications in the legislation.

Responsibility for damage

Regardless of the type of damage a tenant, their child, pet or guest has caused (be it accidental, malicious or intentional), the tenant is responsible for fixing it. Note: tenants are not responsible for damage caused by insured events such as storms, bushfire and flood.

Depending on the policy, landlord insurance can provide financial protection if the tenant does not make good on their obligation to repair damage they have caused. Insurance providers may cover the three types of damage listed above, a combination, or no damage.

Modifications and intentional damage –

Then…

Previously, modifications to the property needed landlord permission, so most landlord insurance providers considered any unauthorised modifications to be ‘deliberate’, ‘intentional’ or ‘tenant-related’ damage.

By this, we mean that it was not accidental (completely unintentional, simply an accident, such as wine split on the carpet) or malicious (with the intent to cause damage to the property and carried out with spite, such as kicking holes in the doors).

Instead, it was considered to be damage that was caused intentionally (on purpose). The damage could range from the minor, such as picture hooks in the wall, to the major, such as re-painting the entire property or even building works.

Whether intentional damage was covered by insurance depended (and still does) on the insurance provider. In many cases, this type of damage was excluded. At EBM RentCover we look at intentional damage on a case-by-case basis and may settle a claim on the basis that the damage was caused by the tenant.

And now…

If there is no provision in the state/territory tenancy legislation for tenants to make modifications, either with or without permission, the landlord may be entitled to claim if their policy includes intentional damage cover. This would apply if the tenant makes modifications and does not re-instate the property. For example, if they pave a portion of the yard and vacate leaving the concrete instead of re-instating the garden.

Any modification to which the landlord has consented, or where they are considered to have consented because the legislation does not require permission to be given, is unlikely to be considered intentional damage. A claim may be possible if there is an agreement between the landlord and tenant that the modification would be removed or reinstated (or it is required under the legislation) and the tenant fails to make good. For example, if the tenant had mobility aids installed at the property, with the landlord’s permission, and did not remove them and fix any damage, as agreed, then the landlord may have a claim.

Where legislation allows modifications to be made without landlord consent, the landlord may be able to make a claim if the property is not returned in acceptable condition. For example, if the tenant installs child safety measures, such as child gates, cupboard/drawer locks or wall anchors, and doesn’t remove them, a claim may be possible to recoup the cost of removal and any repairs.

Most legislation details what it considers to be minor modification. Changes to the property outside of these guidelines, made without landlord permission and not removed, may be considered intentional damage. For example, building a deck is not considered to be a minor modification. If the tenant vacates the premises and the landlord is left to demolish the deck and re-instate the property, then this would generally be considered intentional damage. Whether the landlord can claim depends on their policy.

Another issue is that of accidental damage. Any modifications to the property increase the risk of accidental damage occurring. For example, the tenant goes to install a child safety furniture anchor and hammers a hole into the plasterboard damaging the electrics or pipework behind the wall. Landlords should check they have cover for this sort of damage (EBM RentCover automatically provides up to $65,000 in accidental damage cover). It is also important that any modifications that require a licensed trade to carry out the work (such as electrical or plumbing) are performed by an appropriately qualified person. If the work is not carried out as required by law, the landlord’s insurance could be void.

Poorly installed modifications, whether by a tradie or the tenant, not only present damage risks but also liability risks, particularly if they result in someone being hurt or someone else’s property being damaged. Landlords should ensure they have adequate legal liability cover in their policy.

With legislation changing in some jurisdictions, intentional damage has become a bit of a grey area. If your property has suffered damage as a result of your tenant making and leaving modifications, get in touch and we’ll see how we can help.

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are there, contact 1800 661 662 if you have any questions. 

You may also like

View all
The top reasons you need landlord insurance
Insurance insights The top reasons you need landlord insurance

Here are five reasons why a specialist landlord insurance policy is a valuable investment…

24 May 2021 7 mins read
Five misconceptions about landlord insurance
Insurance insights Five misconceptions about landlord insurance

There are plenty of misconceptions floating about concerning landlord insurance. Read on to sort the fact from fiction…

20 May 2021 9 mins read
COVID-19: FAQs and the impact on landlord insurance
Prevention COVID-19: FAQs and the impact on landlord insurance

Read on for an update on where things stand with COVID-19 and landlord insurance…

04 May 2021 14 mins read
Get a quote Back to the top