Tenancy Agreements often include terms such as ‘The tenant shall make good all damage and breakages to the property and its contents that may occur during the term, that are the responsibility of the tenant (with the exception of fair wear and tear and accidental damage by fire).’
The part in question here is the ‘with the exception of…accidental damage by fire‘.
Firstly, the term is taken directly from the Office of Fair Trading guidance on unfair terms in tenancy agreements, now embodied within the Consumer Rights Act 2015.All terms must be “fair” to be enforceable and the fact that the term is shown in the guidance as being “fair” therefore suggests it is enforceable. It may not however be a fair term if “accidental” were removed because by its very nature there must be no negligence.
Going back to the original question, should the term ‘accidental damage by fire ‘ be removed from the Tenancy Agreement?
It makes no sense to remove it. Insurance is a contract for indemnity. If a landlord makes the tenant responsible but do not exclude from the tenant’s responsibility damage by an insured risk, then the insurance company may decline to pay out on the grounds that the primary liability lies with the tenant and only pay up when payment cannot be extracted from the tenant. You could of course make the tenant liable for insurance, but that is unwise in the case of short-term residential lettings. Apart from being risky, there are practical limitations such as insurance may not be available for short periods and the landlord would need to cover void periods.
One final question then… what about replacing ‘accidental damage by fire’ with ‘insurable risk’ as a catchall?
The pitfall of doing this is that you would have to supply full details of the insurance policy with the Tenancy Agreement – If the tenant does not know exactly what’s insured in advance, the term would be unenforceable.
The terms that the Office of Fair Trading suggest are fair (and therefore enforceable) are:
Incorporation of insurance provisions
Details of the landlord’s insurance are provided with this agreement. The tenant shall not do or permit to be done in or about the property any act or thing which may render void or invalidate the insurance of the property or the building against fire or otherwise increase the ordinary premium for the insurance.
Transfer of risk
The tenant shall make good all damage and breakages to the property and its contents that may occur during the term, that are the responsibility of the tenant (with the exception of fair wear and tear and accidental damage by fire).