Protect your rental property against common and emerging risks

Thanks to our partners at Aon for sharing this article.

We’ve all heard stories about the things that can go wrong when you own or manage a rental property, such as a tenant causing accidental property damage or skipping town without paying rent.

But new risks facing landlords and property managers continue to emerge – like injury to a guest at an unauthorised party held at an Airbnb property, a cyber criminal stealing personal tenant data or someone setting up an illegal meth lab on the property you work so hard to maintain.

So what can you do to minimise any claims made against you or your business?

Protect against the common and emerging risks

There are a number of obvious things landlords and Property Managers can do to reduce risks, like screening tenants, monitoring rent collections and ensuring bonds are lodged correctly. But what’s often overlooked is the importance of keeping up-to-date by having good processes in place and being vigilant about record keeping.

We’ve compiled some helpful tips for both landlords and Property Managers:

Hold regular property inspections
These are a vital step in any property management routine, as they allow you to identify any building defects or issues and organise for maintenance and repair of defects in a timely manner.

Document all inspections and maintenance (and provide copies to the landlord and tenant) Record the outcomes of every inspection with a formal report such as an Entry (or Exit) Condition Report that contains detailed descriptions and supporting photographs. Similarly, document any routine property inspections and specify any maintenance and repairs that occur to the property.

Formalise any agreements in writing
If an issue or dispute arises, written documentation will be critical to support or negate a claim so it pays to take the time to keep clear notes to document any discussions or agreements.

  • Try to document all correspondence via email
  • If verbal instructions are given, create a file note to clearly document the discussion and include the date and time for when it took place. Try to re-use words if possible.
  • Insist that all contractors complete a Contractor Appointment Form, supported by a copy of their insurance and current licence.
  • Have a written management agreement between the Property Manager and landlord to specify the Property Manager’s scope and responsibilities.
  • If repairs and maintenance exceed the Property Manager’s limit of authority, get acceptance from the landlord in writing.
  • If the landlord declines a repair or maintenance request, advise the client in writing.
  • A claim can be made up to 6 years after the event, so keep ALL documentation for this period of time

Keep your Property Management staff up-to-date
If you manage a Property Management team, ensure you provide induction for all new staff on agreements, policies and procedures, continually update them with any new changes and hold regular refresher training to reinforce adherence.

Insurance: A smart investment for any investment property

Putting in place these strategies can help you to minimise risk, however unfortunately it’s hard to eliminate risks all together. Accidents are a fact of life, and it’s impossible to protect your rental property against every possible scenario.

That’s where Landlord insurance can provide you with an added layer of security, helping to cover you for any financial burden that may face you in the event of a claim.

We’re by your side

If you would like to learn more about minimising your risk or discuss your insurance coverage, please contact Aon.

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