Landlords Insurance and Tenant Damage

Sim

Administrator
From: Sim' Hampel


I was just reading a policy document for CGU's Landlords Residential Property Insurance.

Under the Rent Default and Tenant Damage section the policy states:

"We will pay if your tenant causes deliberate or intentional damage to your buildings and / or contents. This includes theft, but does not include malicious damage or vandalism."

Anyone care to comment on the difference between "deliberate or intentional damage" and "malicious damage or vandalism" ?

Does anyone have any experience they wish to share with us with making claims under various insurance policies for tenant damage ?

 
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Reply: 1
From: Donna Larcos


I remember querying this too. I think it has
more to do with the section you're looking
under. You don't get rent default for
malicious damage. You only get rent
default when your tenant has left the
premises during the lease or is in
arrears. The malicious damage etc is
covered under the contents part and you
would claim "loss of rent" whilst it was
uninhabitable. I don't think I ever quite got
to the bottom of the difference between
intentional damage and malicious
damage but the above was the gist of
what she told me. Also you must be
aware that you are not covered for theft or
malicious damage and vandalism if your
property is untenanted, even if it is only a
week or two between tenants though I
have had conflicting and somewhat blurry
information on this. You're supposed to
notify them whenever the building is
vacant because then you are only covered
for fire.

Perhaps intentional damage would be a
scenario where the tenant knew
something was wrong but did not notify
you to have it rectified thereby causing
further damage???

I am just making my first claim under this
policy as the tenant left mid-lease having
stolen the dishwasher and dryer, leaving
indelible blue stains on the carpet (toilet
duck?? don't ask) and for some
inexplicable reason removing the top of
the kitchen tap. He is now 9 weeks in
arrears so I get rent default, the stolen
items replaced and the carpet replaced
though whether the last was malicious, I
don't know. There was that fight we had
over the curtains.....

Donna
 
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Reply: 1.1
From: Miakat .


If I remember correctly, intentional damage could be the tenants painting your lounge room a lovely shade of bright purple. It was not necessarily malicious but it was intentional and it has damaged your premises, unless you can find other tenants who will pay a premium to have a bright purple lounge room.

On the other hand, the scenario for malicious damage was a bonfire in the lounge room. Apparently that was a real scenario.

Miakat
 
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Reply: 1.1.1
From: Donna Larcos


This is getting more interesting by the
moment. My landlord's insurance won't
cover the replacement of the locks
because they belong to the "building".
Fortunately, the body corporate insurance
will cover this. However the tap has fallen
into a no man's land. Because the top is
missing we don't know whether it was
malicious damage and the tenant reefed
it off in a drunken binge, or it fell apart in
which case I could probably have claimed
under warranty (if I had the top of the tap)
and the building insurance won't cover
taps as they class it as "wear and tear".
The tenant also hung heavy curtains on
the rods which have "torn" the
plasterboard. Nobody wants to cover this
either because it was not malicious, is
part of the building but not the external
wall which is common property. It is not
classed as contents though I could
probably claim some paint after the
gyprock was fixed. Actually it is probably
the builder's fault for not ensuring that
there was a piece of solid timber across
the top of the girder to hold
aforementioned curtains but I think the 6
mth builder's warranty has also lapsed.
Anyone else had items fall through the
cracks of their insurance policies???
 
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Reply: 1.1.1.1
From: Jas


>The tenant also hung heavy curtains on
>the rods which have "torn" the
>plasterboard. Nobody wants to cover this
>either because it was not malicious, is
>part of the building but not the external
>wall which is common property. It is not
>classed as contents though I could
>probably claim some paint after the
>gyprock was fixed.

My understanding of strata is that you own from the internal paint. This means body corporate owns your internal walls too. So the damage from the curtain rod should fall under body corporate.
 
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Reply: 1.1.1.1.1
From: Kristine .


On 10/11/01 4:02:00 PM, Jacinta Thomler wrote:
>>The tenant also hung heavy curtains on
>>the rods which have "torn" the
>>plasterboard. Nobody wants to cover this
>>either because it was not malicious, is
>>part of the building but not the external
>>wall which is common property. It is not
>>classed as contents though I could
>>probably claim some paint after the
>>gyprock was fixed.
>
>My understanding of strata is
>that you own from the internal
>paint. This means body
>corporate owns your internal
>walls too. So the damage from
>the curtain rod should fall
>under body corporate.
...................****....................

Jacinta:

There is no 'hard and fast' rule regarding boundaries. You would have to check your individual title. Some 'strata' units have the title boundary through the air cavity space of the wall, others include the whole wall, others have the underside of the ceiling/upper floor, etc. The body corporate usually has no responsibility for the interior of a unit, the plumbing which may pass over or through the units, the electrics etc It may, however, have some burden of responsibility for maintenance, damage or replacement if there is a reticulated hot water or heating system.

As to the body corporate 'owning' anything, not so. The body corporate is simply the incorporated ie legal identity of the group of owners as a whole, and it is the owners who then have common, ie undivided shares, in the garden, structure, roof, foundations or whatever. A body corporate may sue, be sued, hold bank accounts, file tax returns and generally behave as a legal entity.

In Victoria, as soon as the plan of subdivision is registered at the Titles Office, the plan is accorded a number, and the body corporate immediately comes into legal existence with the same number. However, while the subdivision remains under one ownership, the body corporate may not be active in a meeting sense (that would be a small meeting!), but must still meet its obligations with regards to insurance, both building and public liability, etc

Once multiple ownership occurs, the various owners are required to convene the first general meeting of the body corporate usually within fifteen months and annually thereafter. The body corporate may draft a budget and set contributions, and these are claimable under law. When I was a body corporate manager (over 80 properties) one of the bodies corporate was in the process of suing an owner for the recovery of unpaid fees, interest and legal costs.

The body corporate (owners) may decide to appoint a body corporate manager, and this does not necessarily have to be a licensed estate agent. The body corporate may have its own bank accounts, with owners as signatories, and thus any owner, or the local accountant, or a specialist body corporate management company etc, may keep the books. However, if the accounts earn interest, the body corporate will be required to lodge tax returns.

Sinking funds, unfortunately, are not as common as they should be. Funds may be calculated for eg repairs to common driveways, repainting the exterior, removal of trees or whatever is necessary, and a budget amount decided upon to make provision for this future expense. Should an owner sell, their contributed funds remain in the common fund, and their share then becomes an asset of their unit upon sale. They may wish to make adjustments at settlement for this, but it is generally regarded as a 'financial' improvement to the property as if the improvement had already happened in a factual sense.

Regarding individual owners painting the exteriors of their units in individual colours, some developments encourage this as it minimises the box like appearance of some developments. Most, however, have included resolutions in minutes of meetings, or have even lodged 'special rules' with the Titles Office regarding uniform presentation of the development, and a registered colour scheme.

The Standard Rules of Bodies Corporate are prepared by legislation and may only be changed or added to by resolution of the body corporate and actual registration on the title of the property/ies with the Titles Office. These are legal matters and run with the title. However, the only recourse individual owners may have against an individual not 'playing by the rules' is to apply to VCAT or to take a civil action for compliance. Not as costly as it sounds, but more bluff than bluster, as enforcement by the Magistrates Court can certainly be costly and time consuming, to say nothing of creating discord amoung a group of neighbours.

In Victoria and probably other states as well, you can actually read legislation on line. The Subdivisions Act of 1988 has all necessary information and reading this will remove uncertainty when dealing with any subdivided development.

If you own or live in a multi-unit development, the cost of a copy of the Act and the associated Regulations is only a few dollars and can be ordered over the phone. Having a copy handy could certainly help dispel myths and perhaps avoid misunderstandings created by hearsay.

Hope this is of some help

Kristine
 
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Reply: 1.1.1.1.1.1
From: Jas




> Jacinta:
>
> There is no 'hard and fast' rule regarding boundaries. You would have
to
> check your individual title. Some 'strata' units have the title
boundary
> through the air cavity space of the wall, others include the whole
wall,
> others have the underside of the ceiling/upper floor, etc. The body
> corporate usually has no responsibility for the interior of a unit,
the
> plumbing which may pass over or through the units, the electrics etc
It
> may, however, have some burden of responsibility for maintenance,
damage
> or replacement if there is a reticulated hot water or heating system.
>
> As to the body corporate 'owning' anything, not so. The body
corporate is
> simply the incorporated ie legal identity of the group of owners as a
> whole, and it is the owners who then have common, ie undivided shares,
in
> the garden, structure, roof, foundations or whatever. A body
corporate
> may sue, be sued, hold bank accounts, file tax returns and generally
> behave as a legal entity.

Hey there Kristine,
I knew some of that, but thanks for the rest.

Jacinta
 
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