Monthly Archives: August 2014

Renting Without Insurance: Why So Many Tenants Do It

iStock_000002694005Small-300px

In the wake of Sunday’s magnitude 6.0 earthquake that rocked northern California, it came to light that only 12% of California’s residents have insurance that includes earthquake coverage, according to a press release from the Insurance Information Institute.

But here’s an even more surprising statistic: According to a recent survey by InsuranceQuotes.com, only 40% of apartment tenants across the United States have any insurance coverage at all.

Short of an earthquake, there are many ways your belongings can get damaged or lost, such as by fire or as the result of a theft. Having a good renter’s insurance policy in place covers your personal property loss in many situations, plus it gives you liability coverage for times when a guest trips and breaks a leg in your apartment.

What’s Your Reason?

If you’re an apartment renting without insurance, take a look at the common reasons why so many tenants don’t have a policy in place. If any of these reasons looks familiar to you, it may be worth revisiting the issue:

  1. You didn’t know it’s available. Some tenants get so caught up in the excitement, stress, or fatigue of the apartment search process that they don’t consider insurance. Others don’t think about renter’s insurance because they assume that insurance is only a homeowner’s concern. But renter’s insurance exists as an option to help compensate tenants for property damage and injuries. Even if you never need to file a claim, knowing you have a policy in place can bring you valuable peace of mind.
  2. You haven’t gotten around to it. Did you know you can compare renter’s insurance policies and buy one online? The process is probably easier and less time-consuming than you think. Just search the Web for “renter’s insurance” and then visit the sites of top insurers to determine coverage and pricing. As a tip, if you already have automobile insurance, a good place to start is to check your auto insurer’s website to see if it also offers renter’s insurance coverage. Maintaining two or more policies with the same insurer may qualify you for a multi-line discount.
  3. You think your landlord’s insurance is all that’s needed. Picture what your apartment looked like before you moved in. That’s what’s covered by your landlord’s insurance. All the stuff you love that you brought with you to the space, from the living room sofa to the flat-screen TV, would be covered only by a renter’s insurance policy. Plus, don’t forget that renter’s insurance also has a liability coverage component, which can save you thousands of dollars in the event someone gets hurt.
  4. You don’t want to spend the money. You may be pleasantly surprised to discover that renter’s insurance costs less than you thought. Like other types of insurance, the premiums depend on the level of coverage you select and your deductible, but the average policy costs only between $15 and $30 per month, according to the National Association of Insurance Commissioners.
  5. You believe the chances of something happening are so slim. Hopefully, you’ll have nothing short of an enjoyable apartment living experience. But keep in mind that a crime or other loss can occur at any type of rental property. Even if you live in a gated community or low-crime area, that’s no guarantee that a crime won’t occur. Plus, keep in mind that a criminal can be a neighbor, a neighbor’s guest, or even a tenant’s own guest.
  6. You think it’s not worth the bother because you’re just renting for a year or so. As mentioned above, obtaining adequate renter’s insurance is a fairly quick and easy process. Also, a policy provides the same coverage every day for as long—or as little—as it’s in place. So, if you rent an apartment for only a year, you’ll only pay premiums to cover that time period.

When Landlords Get in the Way of Their Own Success

iStock_000022102932Small-300px

As a landlord, it’s important to learn as much as you can about specific situations and what to do to steer clear of potential liability lurking behind each one. That said, it’s just not possible to know all the answers all the time, given the complex legal landscape and changing laws. For example, did you know that if you order credit reports as part of your tenant screening, you can get into trouble with the federal government if you don’t follow certain rules for the disposal of the reports when you’re done with them? Even if you were aware of this, chances are there’s something else you don’t know.

So, what’s a prudent landlord to do?

While it’s certainly important to strive to learn as much as you can about specific situations and laws that pertain to your business, even better advice is to run your property in a thoughtful and careful way. This way, you keep a watchful eye on liability traps while always taking time to seek answers, strategies, and solutions as new or challenging situations arise.

In the last Roundup, I took a look at risky behaviors that tenants commonly engage in (see “Elevator Surfing and Other Bad Ideas,” August 15, 2014). Unlike tenants, landlords have a business to run, which means they have even more at stake. A poor decision or a rush to action can jeopardize the integrity of a rental property and the safety of those who live in it, not to mention the business’ bottom line.

Here are top ways to ensure that your behavior or procedures won’t lead to problems at your property:

  1. Not always following the law. Before taking any adverse action, consider whether you’re at liberty to do so. Some landlords know what’s required of them yet they take the law into their own hands because they want a speedier path or more favorable outcome. For example, rather than follow the judicial process to evict a tenant, some landlords engage in “self-help evictions” by shutting off utilities or even removing tenants’ belongings from their apartment and then changing the lock. Other landlords don’t follow the law simply because they didn’t think about whether there might be any laws that apply to the situation. For example, since trespassing is illegal, some landlords assume it’s okay to set traps for trespassers, but the law imposes at least a minimal duty on property owners to not intentionally harm trespassers. If you find yourself in a situation in which another person’s rights are affected, there’s a good chance there’s an applicable law.
  2. Taking too long to respond to issues. Too often, particularly when it comes to property ownership, problems arise from inaction. For example, delaying repairs to a small leak in a tenant’s refrigerator could yield a much costlier bill down the road, when you must deal with a large leak that has caused substantial property damage. Similarly, when several tenants complain about a harassing neighbor and you don’t respond, you may find yourself later responding to a lawsuit claiming you should be held liable for harm suffered after the neighbor has committed a crime.
  3. Not protecting yourself. The last thing you want is to do everything right but still have to pay in the end. Don’t rush to throw away important documents, such as recent tax returns and key compliance documents if your property participates in an affordable housing program. Also, keep good written records to ward off unfounded claims of discrimination. For example, keep an apartment availability log that backs you up should a prospective tenant claim you didn’t tell her about all available apartments. If you decide there’s a valid reason to make an exception to a house rule, document the reason or modify the rule itself so that you can be sure to make exceptions consistently going forward.

Elevator Surfing and Other Bad Ideas

433766_63731070-300pxThere are plenty of things that landlords and tenants can and should do to improve various aspects of their rental experience. For example, landlords should follow tips for safeguarding apartment keys while tenants should take steps to protect themselves if a roommate pays rent late. But a recent report about a New York City man’s tragic elevator surfing death is a reminder that it’s also important to be aware of what shouldn’t be done because of the risks involved.

Elevator surfing is the term for an “urban sport” in which the participant rides on the roofs of elevators, sometimes taking it further by jumping between cars or riding a counterweight, according to reporting by Vocativ. Of course, not only does the surfer risk his life, but the unnatural strain that such an activity places on a building’s elevator equipment can lead the elevator to malfunction, putting all tenants’ safety at risk.

Don’t Try These at Home, Either

While refraining from elevator surfing and other clearly reckless activities is wise, there are far less extreme activities and habits that tenants commonly engage in that also create serious risks. If any of these examples are familiar to you, you may wish to rethink your behavior to help ensure a safe tenancy:

  1. Keeping your apartment door ajar. Many tenants leave their apartment door slightly open, or they turn the deadbolt to prevent the door from shutting, when they’re leaving their apartment to run a quick errand, such as check mail, tend to a load of laundry, or resolve an issue with a neighbor. This makes it easier to return without having to fuss with your keys or even turn the doorknob, which could be difficult if you’re carrying a laundry basket or package. Although keeping your door open is convenient, consider the risk before you do it. If you’re just walking down the hallway to drop off bottles for recycling, that’s one thing. But an errand on a different floor may run longer than you anticipate, and in the meantime the door to your home is unlocked, open, and unattended.
  2. Heating your apartment with your oven. When the outside temperature plummets and your apartment heat isn’t working as well as it should, it’s tempting to try to seek warmth any way you can. Insufficient heating in the winter is a serious matter that you should bring to your landlord’s attention to get fixed immediately. Until it’s fixed, you may need to dress in additional layers, buy a space heater (or borrow a friend’s), or even spend the night elsewhere, if the cold is unbearable. But don’t consider turning on your oven and leaving its door wide open overnight as a heating alternative. Although it may raise the mercury a bit, the risk of fire and accidental injury isn’t worth it.
  3. Letting anyone gain access to your building. Criminals and others who have no business at a rental property often manage to gain access by taking advantage of a tenant’s lax attitude with the intercom system or fear of coming across as rude when it comes to holding entryway doors for the next person. If you’re quick to buzz people into your building without checking who they are or you make a habit of assuming that the person behind you as you enter your building has the right to do so, keep in mind that you may be opening the door to crime.

Tenants aren’t the only ones who can unwittingly cause harm or create problems at a rental property through their actions. Landlords, too, should avoid certain behavior so they may keep their tenants safe, their property sound, and their business running profitably. If you’re a landlord, stay tuned for some common yet risky behavior patterns to steer clear of, coming up in the next Roundup.

Thinking About Drinking: Lessons from the Recent Toledo Scare

iStock_000000236919Small-300px

When we drink a glass of water, take a shower, or even brush our teeth, we assume that the water we’re using is safe. But sometimes, routine testing reveals that a town’s water supply has been contaminated or is otherwise unsafe. This was recently the case in Toledo, Ohio, where discovery of high levels of a toxin call microcystin, caused by an algae overgrowth, led the town to warn over 400,000 residents to avoid the water for three days. Even short of a confirmed contamination, a town may uncover a quality standards issue, such as an unexpected loss of pressure in the water distribution system, which could lead to a precautionary water ban.

Local governments that learn about or suspect a water safety issue alert the public by issuing notices with names such as “do not use notice” or “boil water alert.”

Because a water issue can lead to serious digestive illness or worse, landlords and tenants alike should take such notices seriously. Here are some important points to keep in mind:

Tenants

If you’re a tenant and learn about a water problem at your building, don’t assume you know what to do. Even if you’ve experienced a water safety issue before, the new alert notice may contain different instructions on how to proceed. Be sure to read the notice carefully so that you and your family know which precautions to take to stay safe. If you believe the notice is unclear on what to do when it comes to using water to bathe, brush your teeth, shave, wash your clothes and dishes, cook, feed pets, or any other purpose, call the number on the notice for clarification.

It’s also a good idea to tell neighbors about a water safety issue, especially people whom you believe might have trouble reading or understanding the notice. If you don’t see your landlord taking steps to alert tenants, take the initiative and post a copy of the notice in a place where your neighbors are likely to go, such as on a bulletin board near the mailboxes.

Finally, follow the issue carefully by visiting your town’s website and watching or reading the local news so that you know when the water restrictions have been lifted and it’s safe to drink and use your apartment’s water again.

Landlords

A landlord’s top priority should be the health and safety of tenants. So, if you learn about a water problem that affects your rental properties, don’t sit back and assume your tenants will learn about it. Instead, inform your tenants about the issue by posting a copy of the notice in common areas, such as entryways and the lobby. Also, consider running off copies to deliver under each tenant’s door and sending a blast email.

On top of health concerns, landlords also need to think of their business and take care to avoid liability traps after a water safety issue comes to light. Although your local government is responsible for sounding the alarm on a water problem, you don’t want to act in a way that gives tenants reasons to claim that you should be held liable if they fall ill.

If tenants start asking you for clarification about the notice, make sure your staff knows not to offer advice or explanation. They should only help by encouraging tenants to read the notice carefully and in its entirety and then use the contact information on the notice to get any further clarification. Remember that neither you nor your staff work for the town health department or the water utility company, and you shouldn’t feel pressured to come across as if you do. So, if a tenant tells you she has a pitcher with a water filter, don’t rush to say that it’s safe to use. If another tenant asks you if it’s okay to boil water before drinking it, don’t assume the answer is yes. (Although, in certain circumstances, boiling contaminated water could make it safe to drink, in the recent Toledo case, residents were actually warned not to boil water because it would increase the toxin’s concentration.)