Hi Guys,
I'm new around here, been lurking for a while but am ready to jump in and mix it up with you guys. My interest is in Commercial property. I'm a new Commercial Investor and am looking to learn / expand my knowledge base with the help of some of the more mature investors around here.
My first (of many) questions relates to Insurance. It is a given that the Lessor needs to maintain full building Insurances. The tenant should also have insurance covering them for theft, fitout damage, public liability, glass and fire.
What do you believe the course of action would be in the event of a fire. Say the tenant causes a fire (originates within the tenancy due to what ever reason) that then damages or destroys the building structure, would the tenant's insurance cover them for internal damage and the Lessor's insurance pick up the building damage? Would the Lessor's insurer then claim against the Tenants Insurer? If this is the chain of events, if the Lessor was negligent in ensuring the Tenant had adequate policies in place (maybe no policy at all) would the Lessor's insurer reneg on the claim due to the absence of the tenants policy?
The reason behind the question is I am looking at a future purchase where the existing Lessor is very slack on paperwork etc. He would have building insurance currently but would not have documentation from the tenants confirming if they have current (or any at all) insurance themselves. It is a condition of the lease that they have and maintain insurance but he has not effected the clause to ensure they comply. I would presume at this stage they have no insurance.
Thoughts please...thanks
I'm new around here, been lurking for a while but am ready to jump in and mix it up with you guys. My interest is in Commercial property. I'm a new Commercial Investor and am looking to learn / expand my knowledge base with the help of some of the more mature investors around here.
My first (of many) questions relates to Insurance. It is a given that the Lessor needs to maintain full building Insurances. The tenant should also have insurance covering them for theft, fitout damage, public liability, glass and fire.
What do you believe the course of action would be in the event of a fire. Say the tenant causes a fire (originates within the tenancy due to what ever reason) that then damages or destroys the building structure, would the tenant's insurance cover them for internal damage and the Lessor's insurance pick up the building damage? Would the Lessor's insurer then claim against the Tenants Insurer? If this is the chain of events, if the Lessor was negligent in ensuring the Tenant had adequate policies in place (maybe no policy at all) would the Lessor's insurer reneg on the claim due to the absence of the tenants policy?
The reason behind the question is I am looking at a future purchase where the existing Lessor is very slack on paperwork etc. He would have building insurance currently but would not have documentation from the tenants confirming if they have current (or any at all) insurance themselves. It is a condition of the lease that they have and maintain insurance but he has not effected the clause to ensure they comply. I would presume at this stage they have no insurance.
Thoughts please...thanks