INSPECTIONS & INSURANCE
July 18th 2016
OF WHAT BENEFIT IS IT TO DO REGULAR INSPECTIONS?
Regular property inspections are a must to keep on top of regular maintenance & repairs required within a property, so as to reduce the often greater cost of issues that arise and go unchecked. Property inspections also give landlords (& Property Managers) peace of mind that the property is being well cared for by the tenants. Many insurance companies now state that regular inspections are undertaken to validate the insurance policy held for that property.
HOW OFTEN SHOULD INSPECTIONS BE COMPLETED?
At a bare minimum inspections are completed at the commencement and end of tenancies but in order to ensure properties are being maintained by tenants and that maintenance issues are kept to a minimum, inspections should be completed every 3 to 6 months. Insurance policies now often state that 60-90 days inspections must be be completed & documented - in the case of multi property buildings such as apartments, the Body Corporate insurance policy may have different wording and requirements to that of the individual Landlord and it would be prudent to know and understand what is covered by each party.
WHO SHOULD DO INSPECTIONS?
Where a Property Manager has been authorised to manage a property on behalf of a landlord the Property Manager should be completing thorough inspections, with photographs and providing written reports of findings. If there is no Property Manager in place then the Landlord should complete inspections within the legal bounds of the Residential Tenancy Act by providing a minimum of 48 hours and maximum of 14 days notice to the tenant of the inspection date & time, allowing the tenant to be present should they wish.
WHAT SHOULD INSPECTIONS COVER - WITH REGARDS TO APARTMENTS?
A thorough inspection of an apartment will include visual assessment of each room and the outside areas. Looking for signs that maintenance is required, for damage (intentional of otherwise), for damp or mould - apartments can be poorly ventilated so it is important that tenants are made aware of what damage mildew & condensation can do. An inspection provides a good time to check that smoke alarms are working (& are still installed), bathroom and kitchen extractions work, clothes dryers are being cleaned of lint (fire hazard), that there are no dripping or leaking taps & pipes - anything that a tenant may have overlooked or not be aware of. The inspector should take photographs of each space and highlight any areas of concern that may need addressing immediately or in the near future.
INSURANCE - WHAT IS COVERED BY THE BODY CORPORATE/OWNER OF APARTMENTS?
Every Body Corporate will have an insurance policy covering the communal areas of a multi unit building, they may also cover the floor, walls and ceilings of individual units for various insurable events. Landlords should be aware of what is covered by their Body Corporate insurance and be aware of any clauses that may prevent them from claiming should the need arise.
INSURANCE - LANDLORD COVER SPECIFICS - READ THE FINE PRINT:
We recommend that Landlords check their insurance policies - they are not one size fits all and can vary from insurer to insurer. A standard house/contents policy will not suffice should your tenant have to move out or ceases to pay rent for any reason - the mortgage payments don't stop just because the rent does.
Ask the following questions of your insurer:
1. What if my tenant does a runner?
2. What if my tenant intentionally damages my property?
3. If my tenant commits murder or suicide in the property - am I covered? how long for?
4. If my tenant loses their job, can not pay rent and will not move out - am I covered?
5. If my tenant can not access the property due to damage or an insurable event in the neighbourhood - am I covered?
6. Is my current insurance policy the best I can get for covering a rental property?
7. Do I have illegal substances/activity protection? Are there specific actions to undertake to make sure I am covered?
READ THE FINE PRINT & INSTRUCT YOUR
PROPERTY MANAGER ACCORDINGLY.
Check your policy - some insurers insist on sending their own assessor prior to work being made on repairs, so make sure your Property Manager is aware of this; so as to not jeopardise your claim.
THE RESPONSIBILITY OF A PROPERTY MANAGER:
To undertake the Landlords wishes in a professional manner, so as to remove the day to day stress of properly managing tenants and property, from the landlord.
It is vital that Landlords provide clear concise communication with regards
to their individual insurance policies and wishes to the Property Manager.