Landlord Liability: Insurance Issues to Look Out For
Becoming a landlord means you are taking the first step towards securing your financial future, but it also means you are taking on additional responsibility in the terms of liability. As the world becomes more litigious, so too does the insurance you may be culpable for which you hadn’t factored into the equation. This highlight again, how imperative it is that your Property Manager utilises only the most robust tenant screen processes.
1. Dogs with a Record
Many a tenant has a beloved dog whom you hope they will declare on their tenancy application. Not all dogs however have a good track record and for those who have a record of harming people, can demonstrate a potential liability for you as a landlord, particularly if you are aware of their history. If you’re happy to allow dogs on your property, it is your responsibility to check with the owner to ensure their pet have no history of malicious acts. It is also an idea to double check with the local animal control office to ensure there are no instances on record. In addition to this, there are some breeds of dogs which aren’t covered under your homeowners insurance policy so it pays to do some research into this area before moving forward with a dog on the application form.
2. Potential Hazards
As a landlord, one of your biggest responsibilities is to ensure you are renting your property in a safe and well maintained condition. If you are aware of any hazards, it is critical you fix or remove them as soon as possible and especially prior to allowing tenants to move in. In the event a tenant reports an issue, it is your responsibility to address the issue in a timely manner. If action is not taken, it is within the tenant's right to have it fixed at your expense so it’s wise to act quickly to not only eliminate the hazard but to also ensure the expense of fixing it doesn’t blow out.
3. Beware the Criminal Masterminds
If you’re housing a criminal mastermind on your property, there are circumstances in which you, the landlord, could be held liable. This is of particular importance if you’re aware of their illegal activity and have chosen to take no action and again highlights how important the tenant screening process is from the outset. Ask your Property Manager to run police checks of any tenants to ensure that any known records are declared through the initial screening process.
4. We Do Not Discriminate
The Fair Housing Act of 1968 requires that landlords do not discriminate against potential tenants based on religion, sex, race, colour, national origin, familial status or disability. The safest and most fair way to screen tenants is to have a tenant selection criteria which is utilised every time potential tenants are considered. This provides a record in which it’s demonstrated that each potential tenant is considered fairly and equitably.
If you are a new landlord, it’s recommended you select an experienced and competent Property Manager who can guide you through the process with confidence. Regardless however, it is still your responsibility to educate yourself on what being a landlord means and how you can treat tenants well whilst also ensuring your own rights are respected.