The government is considering legislating to overturn a court ruling that makes landlords liable for accidental damage by tenants.
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A landmark Court of Appeal ruling this year made landlords liable, whether or not they had insurance.
Building and Housing Minister Nick Smith said that ruling and others by the Tenancy Tribunal reduced the incentive for tenants to take care of the property they rented.
He said such interpretations of the law would add to the sector's costs and drive up insurance and rents.
Dr Smith said he was considering making tenants liable for carelessness or negligence up to the value of the landlord's insurance excess, but not exceeding four weeks' rent.
"This issue is causing grief for the Tenancy Tribunal. We want to move quickly, but realistically this is an issue that is going to take some time for us to work through, and I hope we would have the law tidied up by next year."
Dr Smith said he had asked the Ministry of Business, Innovation and Employment to consult tenant and landlord groups.
