Landlord Obligations...
 
Greetings dear readers & welcome to our third week of February ~ gee where has the time gone? In our article this month as the result of an enquiry last week, I want to share an issue under many policies with regards Landlords Obligations when a property is rented or leased.
 
Typically in letters I send out each week, certainly for renewals, I make the following comment:

Duty of Disclosure & Definition of your Business
Please note your ongoing duty of disclosure for anything of a material nature which may influence an insurer in their decisions concerning the future cover & contact me immediately if you have any questions or wish to discuss this. The Insurance Law Reform Act deems a material fact as being one which would influence a prudent insurer in deciding the terms on which to offer cover.  Yours is a common law duty & failure to disclose material facts, or misrepresentation of them, may render the insurance void. The duty of disclosure does not include matters that are of common knowledge so if in doubt then it is best to discuss with me.
 
Every policy of insurance without exception I have seen notes this requirements, & as I recall insurers are obligated by legislation compliance requirements to remind clients of their obligations. To be fair, especially with Liability products today, in our rather fragile current environment it is not unreasonable for an insurer to be aware of any changes which may have occurred during the year, like change to business activities, turnover, staff #s & potential likelihood of any claims.
 
So too for a leased property, there are client requirements to be met to better manage the risk & reduce both insurer & client exposure. So, this month, I thought we would share those requirements of the typical policy.
 
Landlord Obligations
The following conditions apply where the home is tenanted.
      a. You or your managing agent must:
i. Exercise reasonable care in the selection of each person who is a tenant; and
ii. Obtain satisfactory references for each adult tenant prior to that tenant moving into the home; and iii. Keep records of the checks undertaken and references obtained and provide these to us if we ask for them.
      b. At 6 monthly intervals, many policies can be only 3 months, or whenever there is a change of tenant, you or your managing agent must:
             i. Complete an internal and external inspection of the property; and
             ii. keep photos and written records of the inspections and provide these to us if we ask for them.
      c. If you have purchased the Optional Additional Benefit ‘Landlord’s Extension’, in addition to complying with the requirements of a. and b. above:
             i. you have an obligation to mitigate any claim you make for your loss of rent under this policy by taking all reasonable steps to find suitable alternative tenants and must provide us with records of steps taken if we ask for them; and
             ii. you or your managing agent must actively monitor rent for your home and if the rent is 10 days in arrears, you or your managing agent must provide a written notice requiring the tenant to remedy the arrears. If the unpaid rent is not received within a further 5 days, you or your managing agent must personally deliver a second notice to the tenants requiring the arrears to be remedied.
            You or your managing agent must also ascertain at this time whether the tenants are still living at the home.
 
For those clients with rental properties, if this brief executive summary requires further clarification, please feel free to contact us. .                  

With our best wishes,
Kenn & Carla
 
www.paradisebrokers.co.nz




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