If you’re a landlord, liability is one of the most important considerations when it comes to renting out your property. And while the risks can be significant, there are ways to protect yourself and your tenants. This article looks at seven common risk factors for landlords and what you can do to minimize your liability.
1. Property Damage
Your renters’ insurance policy will cover any damage to your rental property from fire, vandalism, or other insurable events (minus your deductible). You should also make sure you have any necessary city permits for construction or renovations on your property.
But if there’s been property damage that you could have prevented with proper maintenance — such as a leaky roof — you may be held liable for it by the courts. To mitigate this risk, landlords should conduct regular inspections of their properties and perform routine maintenance when needed.
2. Tenant Injuries
If someone gets hurt on your premises and it’s determined that their injury was caused by something you had control over, you may have landlord liability for medical expenses, property damage, and other costs associated with the accident.
You may also be held liable if an injury occurs because of criminal activity on your property. For example, if a tenant is mugged in a dark parking lot because there aren’t enough lights, you could be found negligent for not installing more lighting or hiring security guards to patrol the area during late hours.
This is why all landlords should carry general liability insurance coverage, which includes bodily injury protection up to your policy limits. The more comprehensive your coverage is, the better protected you’ll be against potential lawsuits.
3. Water Leaks
If a landlord has a water heater onsite and it bursts, the entire building could be flooded. Even if the leak is in a tenant’s apartment, it can affect neighboring units and might even spread to the rest of the building.
In most cases, the landlord would be responsible for any damage caused by a water leak. As a result, it is important for landlords to check their insurance policies to make sure they have enough coverage to repair any damage caused by water leaks or other disasters.
These pests are not only annoying but also expensive to eradicate. The costs involved in ridding a unit of bedbugs, unfortunately, fall on the property owner — whether it’s an apartment building or a single-family home.
Landlords can mitigate this risk by performing regular inspections of units and checking for signs of bedbugs, such as bites or telltale droppings on mattresses and other furniture.
5. Dog Bites
All dogs can bite, and landlords are responsible for preventing injuries on their property. For example, if someone is visiting the property and is bitten by a dog owned by a tenant, the landlord could be held liable for damages.
Even if the dog doesn’t belong to the landlord, they may be responsible for injuries that occur on their property. Private landlords should require tenants to agree not to have dangerous breeds on the property, and they should verify that any breed conditions are being met.
6. Broken Locks
If someone breaks into a rental property by way of an improperly functioning lock, a court could find that the landlord was negligent and require them to pay damages if someone is injured during the break-in.
Private landlords should check all doors and windows regularly to ensure they’re locked properly and functioning as intended before renting out a property.
7. Discrimination Lawsuits
As a private landlord, it’s illegal to discriminate against tenants based on race, gender, and other protected classes in most areas. If someone feels they have experienced discrimination when applying for your rental home, you could face landlord liability for damages as well as attorney fees and court costs.
If this happens, make sure to consult an attorney right away so they can help you defend yourself in court or negotiate a settlement agreement.
Understanding Landlord Liability
If you own rental property, you need to be aware of landlord liability risks. You may be responsible if your tenants or their guests are injured on the premises or if their property is damaged.
As a landlord, you are a business owner and need to take all of the necessary precautions to be prepared for any liability exposures.
Whether your investment property portfolio is big or small, you should not begin renting any property to anyone without taking some steps to protect yourself against landlord liability in case an injury were to happen on the property.