But the more important question should be “Would the landlord be left better off than before?” That’s where the concept of betterment comes in.
What does “betterment” mean?
Betterment refers to a situation where a landlord ends up in a better position after a repair or replacement than they were in before the damage occurred.
Put simply: A tenant is responsible for damage they cause (within legal limits). But they are not responsible for upgrading your property
If an old item is damaged and must be replaced with something newer or better, the landlord usually has to cover the improvement portion.
Betterment vs wear and tear (they’re related, but not the same)
You’ve likely already heard about fair wear and tear - the gradual deterioration of items through normal use.
Betterment is what happens after damage occurs and replacement is required.
Think of it like this:
Wear and tear answers: “Is the tenant responsible at all?”
Betterment answers: “If they are responsible, how much is fair?”
Even when damage is tenant-caused, betterment limits how much of the replacement cost can reasonably be recovered.
A practical example: replacing a broken item
Let’s say:
- A tenant accidentally drops something heavy and breaks a toilet cistern,
- The model is discontinued,
- Full replacement costs $900.
Even if the tenant is responsible for the damage, they are not automatically liable for the full $900.
Why?
Because:
- The original cistern wasn’t brand new,
- The replacement is new (and likely better).
- The landlord ends up with a longer-lasting asset than before.
That difference is betterment, and the landlord must absorb it.
How the Tenancy Tribunal looks at betterment
The Tribunal typically applies a depreciated value approach.
This means asking:
- How old was the item?
- What was its expected lifespan?
- How much useful life was left?
For example:
- If a cistern had a 20-year lifespan and was already 15 years old, only about 25% of its value remained
- The tenant might only be liable for that remaining portion
- The landlord pays the rest, even if replacement is unavoidable
Tenants pay for the value that was lost — not the cost of the upgrade.
What if the item can’t be repaired?
This comes up often with discontinued appliances and older fittings.
If repair isn’t possible, replacement may be the only option - but that doesn’t change the betterment principle.
The tenant still contributes but not beyond the value of what they damaged.
Betterment still applies even when the tenant is at fault
This is the part that often surprises landlords.
Even when damage is careless (not accidental), clearly tenant-caused and even accepted as the tenant’s responsibility
Betterment still applies.
On top of that, the landlord’s insurance excess, or four weeks’ rent caps (whichever is lower) may still apply. So the recoverable amount may be further limited.
How landlords can approach this fairly
A good rule of thumb - Think what you lost, not what you spent
Before charging a tenant:
- Consider the age and condition of the item
- Estimate its remaining lifespan
- Remove any upgrade or improvement component
- Apply the legal liability cap (e.g. landlord's insurance excess)
- Document how you reached the figure
This approach aligns with Tribunal expectations and reduces the risk of disputes escalating.
Learn more about Fair Wear and Tear
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice, you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.
