Lease Language – It’s a Wrap
Oct 15, 2015
Look at your investment portfolio and practices --- ask yourself what it would take to be “best in class”, proactive vs. reactive. These approaches translate directly into premium savings. Here are a few last benchmarking items:
1. Encourage prompt notice of maintenance requests. Keep a written log and document with photos whenever possible. Keep a written incident log for any complaints, including the complaint resolution.
2. Include a provision that allows both interior and exterior inspections with proper notice, at least annually, to check on needed maintenance items, any evidence of unwanted pests or vermin, water intrusion, mold, or undesirable tenant behaviors like hoarding. Documented annual inspections and regular maintenance plans can help deflect “habitability” or “lack of maintenance” claims.
3. If your property is occupied on a “lease to own contract” or a “contract of sale”, require the lessee to carry their own insurance for property and liability, and provide proof of it, naming you the building owner as an Additional Insured and Loss Payee. If they don’t want to purchase the insurance themselves, make sure the contract gives you the right to purchase and charge them for it. Your tenant/owner will need to follow the same maintenance plan and standards you would. Include the right to annual interior and exterior inspections in the contract.
Don’t want to look like the bad guy when you implement all these new rules and loss control measures? Add a cheerful note that your attorney made you do it, and that the insurance company requires it. Remember, these risk tips keep things nice for everyone.
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