That's what I thought! I think people quoting Canadian law on an Australian property forum is very misleading and pointless. 
Property damage - tenant pays or Insurance claim?
- Thread starter Pedro61
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That's what I thought! I think people quoting Canadian law on an Australian property forum is very misleading and pointless.
It's bad enough that laws can differ between states, without bringing international law into the mix.
I've learned to be sure to qualify any comments I make with the warning that things may differ in other states.
Marg
That's what I thought! I think people quoting Canadian law on an Australian property forum is very misleading and pointless.
Definitely agree with this.
cheers
That's what I thought! I think people quoting Canadian law on an Australian property forum is very misleading and pointless.
We may not be as ignorant of these things, as you may think.
Rob is from Australia..I am Canadian.
We are from both countries.
Many here are so close minded and unable to be bothered in finding out your rights. you'd rather just take the easy route and PAY.
Well, I'm just suggesting, you don't always have to be the one paying.
You may want to check this out
http://www.ebminsurance.com.au/personal-and-landlord-insurance/tenant-cover.php
Kathryn is far too polite
Ignorance is bliss, the happy meter is off the scale here today
This Canadian, is from Melbourne.
Not my fault if a reader is
too lazy to
require the tenant to insure their liability, just as ALL rental businesses do, everyone on Somersoft writes how they are business persons, yet invariably allow another person to draft the contract
anyone else retire, on the poceeds of the Resi portfolio begun 6 years ago ?
Ignorance is bliss, the happy meter is off the scale here today
This Canadian, is from Melbourne.
Not my fault if a reader is
too lazy to
- check what is really around,
- become famliar with the actual legislation for their area of operation,
- draft a lease contract that protects them,
- monitor the PM in place as their agents
require the tenant to insure their liability, just as ALL rental businesses do, everyone on Somersoft writes how they are business persons, yet invariably allow another person to draft the contract
anyone else retire, on the poceeds of the Resi portfolio begun 6 years ago ?
This is where the differing opinions are. You are saying a tenant can insure the building, whereas others here in Australia are saying that you can't, only the owner can. Either way, I don't care, it's not an issue I have to deal with so I'm not going to investigate the definitive answer.
See...you are still getting it wrong.
He didn't say the tenant was insuring the building, he said the tenant was insuring his legal liability.Big difference.
I understand exactly what AlmostBob and kathryn_d are saying. Their point is that most contents insurance policies - which tenants should have - include a component for public liability, which includes their liability for property damage. This is generally accepted to cover liability against your own negligent acts, such as if you, for example, crashed into a Ferrari on your bicycle. AlmostBob and kathryn_d are suggesting that it might/should also extend to covering negligent damage to a building you occupy under a tenancy agreement.
In Australia, convention has certainly been that tenants are not liable for damage to the building in the case of negligent acts on their part.
AlmostBob and kathryn_d are suggesting - again, excuse me if I'm putting words in your mouth - that we have the legal "hooks" to pursue tenants for property damage (leases and public liability insurance), and it's only convention which has prevented this from happening.
It's an interesting premise. As far as I can ascertain, I don't think there's ever been a claim of this nature - ie against a tenant for damage to the property resulting from an accidental fire, for example - but I also couldn't find any legal reason why a landlord couldn't pursue the tenant's public liability insurance.
My guess is that many tenants don't have public liability insurance, and the only effect of a policy enabling companies holding building insurance policies to go after tenants' public liability insurance would be to transfer costs between parties on any given incident. This would add to legal costs while insurance companies argue over whether the building damage was attributable to tenant negligence (tenant's public liability) or true "accident" (landlord's policy), and thus the insurance companies would be net losers from pursuing tenants, so they just decided not to. Whilst car insurance deals with the issue of whose insurer should pay for any given accident all the time, it's a different scenario, because car insurance assesses risk based on the attributes of the particular driver and vehicle. Public liability insurance, and building insurance, are usually the same regardless of who the landlord and tenant are, so there's no real incentive to ensure that liability is correctly allocated, ie "it all evens out in the end".
Given the common law principle that if you have a loss on an insurable asset, a third party authorised to use that asset has their liability limited to the excess, the way to "test" it in Australia would be to lodge a claim on your building insurance and tell your insurer that you don't want it counted against your policy, that you think it's the tenant's fault and you want the insurer to go after the tenant's public liability insurance. I think you'd get shocked silence and confusion from the phone squirrels, until you got handed up the line to the point where you were met with hysterical laughter.
AlmostBob and kathryn_d are suggesting that it might/should also extend to covering negligent damage to a building you occupy under a tenancy agreement.In Australia, convention has certainly been that tenants are not liable for damage to the building in the case of negligent acts on their part.
AlmostBob and kathryn_d are suggesting - again, excuse me if I'm putting words in your mouth - that we have the legal "hooks" to pursue tenants for property damage (leases and public liability insurance), and it's only convention which has prevented this from happening.
It's an interesting premise. As far as I can ascertain, I don't think there's ever been a claim of this nature - ie against a tenant for damage to the property resulting from an accidental fire, for example - but I also couldn't find any legal reason why a landlord couldn't pursue the tenant's public liability insurance.
My guess is that many tenants don't have public liability insurance, and the only effect of a policy enabling companies holding building insurance policies to go after tenants' public liability insurance would be to transfer costs between parties on any given incident. This would add to legal costs while insurance companies argue over whether the building damage was attributable to tenant negligence (tenant's public liability) or true "accident" (landlord's policy), and thus the insurance companies would be net losers from pursuing tenants, so they just decided not to. Whilst car insurance deals with the issue of whose insurer should pay for any given accident all the time, it's a different scenario, because car insurance assesses risk based on the attributes of the particular driver and vehicle. Public liability insurance, and building insurance, are usually the same regardless of who the landlord and tenant are, so there's no real incentive to ensure that liability is correctly allocated, ie "it all evens out in the end".
Given the common law principle that if you have a loss on an insurable asset, a third party authorised to use that asset has their liability limited to the excess, the way to "test" it in Australia would be to lodge a claim on your building insurance and tell your insurer that you don't want it counted against your policy, that you think it's the tenant's fault and you want the insurer to go after the tenant's public liability insurance. I think you'd get shocked silence and confusion from the phone squirrels, until you got handed up the line to the point where you were met with hysterical laughter.
Thanks Perp, once again a very informative post. What I don't understand is, how would the liability component of tenant insurance, if the tenant had it, help the landlord in the opening post? Wouldn't the landlord still either have to make a claim on their building insurance, and the insurance company then go the tenant for negligence if possible (as in the example Kathryn used); or the landlord himself sue the tenant directly for damages, which sounds a lot more costly than just having the tenant re-imburse for the excess of their insurance claim. I was talking about how can a tenant cover themselves directly for the building should they destroy it, which my understanding is they can't. However, they should for their own sake have the liability insurance to cover themselves should someone come after them for the cost but I would have thought that's to their benefit not the landlords.
I'm not trying to be sarcastic or deliberately cause arguments, am just trying to clear my own mind, as it seems two things are being discussed and causing confusion.
I'm not trying to be sarcastic or deliberately cause arguments, am just trying to clear my own mind, as it seems two things are being discussed and causing confusion.
Well... they'd still have to claim on their building insurance, but if the building insurer were successful in pursuing the tenant's public liability, then the claim wouldn't be registered "against" the landlord's policy. I think this is a non-issue because I don't believe that previous claims affect the amount of your policy. They ask about previous claims, I understand, because fraud is so hard to prove; their only protection against fraud is to refuse to insure people who are "particularly accident-prone" eg all their last 3 homes have gone up in flames.
But I believe they only ask these questions to weed out potentially risky clients; but if they accept you, the price of the policy is based only upon what you're insuring, not on their perceived risk of you as an individual (unlike car insurance with ratings etc).Correct.Biggles said:
Well, it's to the benefit of the landlords because many people wouldn't have enough assets/income to cover the potential cost of a building claim anyway. So kathryn_d insists that her tenants have sufficient public liability to make it worthwhile pursuing the tenant. If your tenant's somebody on a low income with only a 2000 Daewoo Matiz worth $3K on a good day (that's my own car I'm paying outBiggles said:
), then in addition to having to establish a new precedent of making the tenant responsible for building damage, you're facing the uphill battle of convincing a judge that they're capable of repaying. You'd probably get $5 a week for however long it takes to repay the damage. Why would you bother, rather than just handing the whole drama over to your insurer?
kathryn_d, have you ever successfully claimed against your tenant's public liability cover?
Fair enough, although not sure how you could enforce tenants have liability insurance. Would you request a copy of their receipt every year that they pay it and issue notice to vacate if they don't have it? That sounds like it'd be tough to do and with costs of re-letting and potential vacancies would this maybe wipe out any benefit of taking the risk of just claiming on your own insurance (with tenant paying excess) if the unfortunate even occurred? Maybe I'm just lazy, but I'd rather just pay the bit extra in premiums (if that were even to happen, although as you point out Perp may not even be the case).
Perp and Biggles,
This was not an "accidental" fire. It was negligence.Would be similar to a tenant telling their dog to sit on the mat by the door and telling them to "sit", while the tenant goes for a cloth to remove the paint (for an example)the dog has all over its feet and fur. The dog doesn't listen, and walks all over the house and shakes his fur..so now there is red paint all over the white carpet and white walls.Let's also assume the paint cannot be removed from the carpet, and walls need to be repainted, because spot painting will not make it look right.
Who pays for this?..usually here on SS there is an outcry of "Tenant pays for this damage!!" This is absolutely no different. The house wasn't burned down. The fire flared up, burnt the rangehood filters to a crisp, Burnt the Pantry, overhead cabinets next to the rangehood, smoked the ceiling and possibly the walls etc, etc.
This wasn't casued by faulty electrical wiring in the kitchen..it was from a tenant being negligent..not an accident.
Do all tenants pay the same rates for tenant Insurance?
Well, I asked my broker this, and the answer is no. It depends on their history of claims too.Generally a tenant pays between $130-$200 year for this coverage.
We do include this as a requirment for our leases.Most BIG rental properties in Canada do. A handful of us smaller ones are starting. Do you think the big ones are doing it because they care about their tenant? Hardly.
We have never had a tenant need to use their insurance.
We give our tenants 15 days from the signing of the lease to provide proof of insurance. If they don't, they are evicted on this clause. We have done this several times, and the Director for the Residential Tenancy Board has upheld our eviction.
We did, in our first 18 months of being a LL have a tenant burn our house rental down.They were supposed to have Tenant Insurance, gave us the impression they did,then admitted they didn't. They were having financial problems etc etc. Our fire insurance paid out the claim. We rebuilt, but because we had to conform to the new building code, it cost $19K more, for which we sued them for repayment. Because we were new to this game, we didn't take an insurnace broker to court to explain that tenant insurance included liability. We ended up losing the case..but came away with more knowledge of what the court required for subsequent hearings.
That is why we insist on insurance and evict if they don't priovide it.They are also responsible until the property is relet, because they broke the condition of the lease.
If our tenant did this, we would tell them to contact their insurance company, pay their deductible, and repair the property.
It wouldn't be thru our insurance at all.
Rob and I do a lot of things other landlords never think of doing.We are running a business to make a profit.A requirement for Tenant Insurnace is only one of them.
My post to this thread just gave another option.
The LL probably wouldn't win...unless the LL made having Tenant Insurance a requirement in the lease.
You won't know until it is tried.
This was not an "accidental" fire. It was negligence.Would be similar to a tenant telling their dog to sit on the mat by the door and telling them to "sit", while the tenant goes for a cloth to remove the paint (for an example)the dog has all over its feet and fur. The dog doesn't listen, and walks all over the house and shakes his fur..so now there is red paint all over the white carpet and white walls.Let's also assume the paint cannot be removed from the carpet, and walls need to be repainted, because spot painting will not make it look right.
Who pays for this?..usually here on SS there is an outcry of "Tenant pays for this damage!!" This is absolutely no different. The house wasn't burned down. The fire flared up, burnt the rangehood filters to a crisp, Burnt the Pantry, overhead cabinets next to the rangehood, smoked the ceiling and possibly the walls etc, etc.
This wasn't casued by faulty electrical wiring in the kitchen..it was from a tenant being negligent..not an accident.
Do all tenants pay the same rates for tenant Insurance?
Well, I asked my broker this, and the answer is no. It depends on their history of claims too.Generally a tenant pays between $130-$200 year for this coverage.
We do include this as a requirment for our leases.Most BIG rental properties in Canada do. A handful of us smaller ones are starting. Do you think the big ones are doing it because they care about their tenant? Hardly.
We have never had a tenant need to use their insurance.
We give our tenants 15 days from the signing of the lease to provide proof of insurance. If they don't, they are evicted on this clause. We have done this several times, and the Director for the Residential Tenancy Board has upheld our eviction.
We did, in our first 18 months of being a LL have a tenant burn our house rental down.They were supposed to have Tenant Insurance, gave us the impression they did,then admitted they didn't. They were having financial problems etc etc. Our fire insurance paid out the claim. We rebuilt, but because we had to conform to the new building code, it cost $19K more, for which we sued them for repayment. Because we were new to this game, we didn't take an insurnace broker to court to explain that tenant insurance included liability. We ended up losing the case..but came away with more knowledge of what the court required for subsequent hearings.
That is why we insist on insurance and evict if they don't priovide it.They are also responsible until the property is relet, because they broke the condition of the lease.
If our tenant did this, we would tell them to contact their insurance company, pay their deductible, and repair the property.
It wouldn't be thru our insurance at all.
Rob and I do a lot of things other landlords never think of doing.We are running a business to make a profit.A requirement for Tenant Insurnace is only one of them.
My post to this thread just gave another option.
The LL probably wouldn't win...unless the LL made having Tenant Insurance a requirement in the lease.
You won't know until it is tried.
The question of insurance, is an interesting one. We recently had a fire, caused by a tenant. We had the repairs carried out under the landlords insurance. At the end, the insurance company asked us to provide all the current contact details etc of the tenant. It was our understanding, they were going to look to him for reinbursement.
On another occasion, a "mouse" damaged water service, flooded its unit, and then the one below. We had the insurer of the upstairs unit, contribute to the cost of the repairs on the lower unit. While they paid new for old upstairs, we only got pro rata downstairs. The other interesting fact was a large portion of the repairs, were covered by the building insurer, not the landlords insurer. I stiil find the cut off, line very blurred in strata situations.
In this situation, we would arrange for the repairs, and then let the insurance company choose their own path.
Perp, we get all tenants to sigh off, that we have recommended that they take our contents insurance, for a number of reasons, not the least of which, their "legal liability" is covered. If a visitor hurts themselves, they will be liable. I am still surprised that many choose to carry the risk them selves. I suppose, it wont happen to them.
On another occasion, a "mouse" damaged water service, flooded its unit, and then the one below. We had the insurer of the upstairs unit, contribute to the cost of the repairs on the lower unit. While they paid new for old upstairs, we only got pro rata downstairs. The other interesting fact was a large portion of the repairs, were covered by the building insurer, not the landlords insurer. I stiil find the cut off, line very blurred in strata situations.
In this situation, we would arrange for the repairs, and then let the insurance company choose their own path.
Perp, we get all tenants to sigh off, that we have recommended that they take our contents insurance, for a number of reasons, not the least of which, their "legal liability" is covered. If a visitor hurts themselves, they will be liable. I am still surprised that many choose to carry the risk them selves. I suppose, it wont happen to them.
After further research, I don't believe a tenant could claim for damage to the landlord's property under their renters' insurance, because there is an insurance principle that you can't make a claim against a "general" insurance policy, for anything which should have been covered by a more specific policy. Otherwise, everybody would just rely on public liability insurance instead of taking out third party motor vehicle insurance (and other policies which protect you against claims for damage to the property of others).
So you can't rely on your public liability insurance to cover you for a car accident where you damage somebody else's car, because that's what car insurance is for. Similarly, a renter's insurance will not pay for damage to a building which should have been covered by the landlord's building insurance.
Regarding the requirement of many US/Canadian landlords to have their tenants carry renters' insurance:
So you can't rely on your public liability insurance to cover you for a car accident where you damage somebody else's car, because that's what car insurance is for. Similarly, a renter's insurance will not pay for damage to a building which should have been covered by the landlord's building insurance.
I doubt this is correct, actually... but if you know of an instance where renters' insurance has covered damage to the landlord's property, please do share!kathryn_d said:
Regarding the requirement of many US/Canadian landlords to have their tenants carry renters' insurance:
My reading is that the primary reason that landlords in the USA/Canada require tenants to have renters' insurance is because it indemnifies the landlord from claims such as slips and falls caused by the tenant's actions (eg leaving a hose lying across the footpath), and dog bite claims due to the tenant's dog. If the tenant doesn't have insurance, the injured person may have cause of action against the landlord for these types of claim.
Have to agree I would also not be a happy chappie if a tenant damages my property, at least you have insurance so make the claim let them deal with the situation and move on to a happier place.
Just don't be a LL that has NO insurance not a very smart option.
Kathryn D - When you say its not an accident and noone walks away from oil on a stove have to disagree here YES people do more than you would think, they even go pick kids up from school believe it or not.
Hope all sorts out for you.
Brian
So Perp, you are stating that any damage a tenant does, would be covered under LL insurance and bond is never used to repair, replace?
You don't seem to differentiate between the terms culpable or accidental.
We do not require tenants to have insurance for the purpose you state. We would not be responsible for any slip or falls etc, inside a tenants leased premise.We are lawfully indemnified, by statute from responsibility for a tenants slip and fall, inside a tenants leased premises.It's solely required for the loss and damage of our property by their negligence. The bonus is their contents are covered.
I think all LL should be contacting their insurance companies and asking what their policies contain. Do not speak to the receptionist. Speak to someone with actual knowledge.
LLs should also be drafting their own leases within the terms of their local state, terriority RTA. Posters on this forum are adamant in their refusal to use standard REI sale contracts, yet they allow the same level of incompetence to control the leases of their most expensive investments.
But it was an accident. That just means that it's an unplanned, undesigned mishap. Yes, it was caused by negligence, same as most accidents whether they be traffic or things burning on a stove, but the result was an accident.
Well, I just got off the phone with Youi, and as long as tenant insurance cover is required in the lease, it would be covered.
http://www.youi.com.au/faq/What_is_tenants_liability_cover
This is one of the reasons we write our own contract leases.
See..a bit of research does help.
Those who say it cannot be done should not get in the way of those who are doing it.
The link you provided refers to the landlord's fixtures and fittings, which would normally be covered by the landlord's contents insurance. I was specifically talking about the landlord's building insurance policy.
Gloating and starting to do a victory dance, and then finding out that you haven't proven your point at all - awks giraffe.
