The Residential Tenancies Act 1986 requires a landlord to provide premises fit to live in and in a reasonable state of repair. So, you must provide your tenants with plumbing that is in good condition and free of leaks. The loss incurred due to damage is likely to be considered landlords' responsibility.
That is not to say that you have to pay the whole bill. Tenants are still responsible for their water use. A fair way to establish your share is to compare the bill in question to the tenants' average water bill. The difference is what you need to cover.
Do note that Section 40 of the Residential Tenancies Act also states that a tenant should notify the landlord as soon as possible about the discovery of any damage to the premises and what needs fixing. If this is not done, the landlord may be able to claim a portion of the repair costs from the tenants.
It is advisable for the issue to be resolved between the tenant and the landlord. If, however, you can't agree, the tenant can apply to the Tenancy Tribunal to try and recover increased water or power costs.
But if it's landlord's name on the bill, then they can issue a 14-day notice to remedy if the bill is not paid by the due date and then apply to the Tenancy Tribunal for a decision.
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.