Liabilities of Being A Landlord

Owning and managing your own rental property seems easy enough. It’s like running a restaurant – we imagine that anybody can do it. Wrong! Managing rental property – even your own – is a business which requires a business mind-set and attention to many details including an entirely different set of insurance issues than those with which you’ve been dealing.

Of course you understand that some changes will need to be made in your homeowner’s insurance when you rent your house. At this point you will no longer need contents insurance unless you have appliances left within – dishwashers, stoves, refrigerators and/or laundry equipment – which can be added to your homeowner’s policy. Your tenant is responsible for insuring his own belongings and, a good renter’s policy will also serve to protect him in other ways. But where does your insurance stop and the renter’s insurance begin? This, as it works out, depends upon the circumstances.

For this reason, it is critical that you impress upon your tenant that they must carry renter’s insurance. As a landlord, you may even want to require proof of renter’s insurance from your tenants before they move in. Not only will it protect their personal possessions, but it may also protect them from liability situations. For example, if the tenant has a guest who trips and falls over the doggie’s chew toy, cracks her head on the coffee table and requires stitches, renter’s insurance may pay that claim since it was the result of the tenant’s negligence.

Of course, there are accidents and claims which aren’t so clear cut. Generally speaking, your tenant will be responsible for his own negligence as you will be responsible for yours. The chew toy is the tenant’s problem. The steps leading up to the building, if in poor repair, leads to a trip and fall, the problem may well be yours. If, on the other hand, the fall is caused by the aforementioned chew toy this time left on the steps by the tenant, the problem lands in the tenant’s lap again.

Your responsibility is to keep your eyes open for possible liability situations. Cracked sidewalks or steps and poorly secured doorway thresholds are accidents waiting to happen. It is in your best interest to fix them as soon as you see them since a slip and fall accident because of such items will be deemed to be a result your negligence.

Your tenant must understand that he, too, has some responsibility for maintenance and upkeep. For example, your contract with the tenant should clearly outline his duties with regard to sidewalks and steps. He should keep them clear of trip hazards, snow and ice. By including this in your rental agreement, you can avoid liability later if the mailman slips on an icy step and is injured.

Part of your duty as a landlord is to schedule and complete regular monthly inspections of the property in order to quickly discover any problems which may have developed. Your tenant should also understand that it is his duty to report hazards immediately to you. In this way you can deal with problems promptly which not only protects you from liability, but also serves to keep your property in excellent condition. If your tenant understands your commitment to proper maintenance of the property, he will be more likely to take good care of your investment.

Being the owner of rental property has its own set of challenges, to be sure, but many of them can be successfully handled by having good understanding with your insurance agent and your tenant so that everybody understands who is responsible with what.

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