Xenia's property management quick tip - Landlord Compensation

When a tenant vacates a property, an outgoing inspection report is done. It's clear that any outstanding rent and water invoices need to be either paid by the tenant or claimed from the bond. It is also clear that when something is broken it needs to be fixed, but how do you deal with a stain on carpet or a burn mark on a kitchen bench top?


One way is to claim the entire replacement through insurance - it will exceed the bond, in this case, the entire bench top was replaced through an insurance claim.
If you need to claim through the tenant directly and they challenge paying $3000 to replace the entire bench (you cannot patch up or fix part of a bench), then a landlord can settle on compensation from the tenant. In this case if the landlord wanted to go down this path, $500 to go towards the landlord replacing the bench sometime in future could be given to the landlord by the tenant to compensate the landlord for the damage. This can be done if an entire claim is not made and if the house is still rent able despite the small amount of damage.

 

Issues such as this have come up a few times in my properties Xenia. This is really useful information.

 

If only my problem was a small stain on the carpet or a slight burn mark on the kitchen benchtop, Xenia!
Try holes punched through in every room, some of them through asbestos walls
black oil and paint deliberately spilt on the carpets everywhere
Architraves, timber skirtings damaged, doors kicked in
broken windows
stolen motorbike lying in my driveway
domestic violence committed in the house by the violent male partner of my female tenant
She came back from the shelter and was very upset that he even smashed her tv to bits

 

That's awful Beanie

 

Beaniegirl, that's terrible. Will insurance cover it all?

 

yes they will

 

Aside from the domestic violence issue that needs to be handled separately to ensure that the tenant is protected, the damage is easy to reverse.

In many ways it is so much easier to put in a claim for malicious damage that is black and white than it is to put in a small burn mark on a bench top as in my example.

There is almost 100% chance that the malicious damage claim will be awarded, in the case of the small marks on carpets of marks on benches, it does take a few pulling strings to get those through. And a PM that is on the ball

 

I had to make 2 claims, one was 'default of rent', the other 'loss of rent' from malicious damage and the time the property is under repair when there is no rent coming in.

So 2 components - one component is the 'default of rent' 14 weeks or $5000 whichever is the lesser
then there's the loss of rent claimed under 'malicious damage' when the property is undergoing repair.

Still will be 2-3k out of pocket or more from this episode
Insurance doesn't cover the first 4 weeks for my policy because the bond is supposed to take care of the 1st 4 weeks
But had to pay excess for firstly just to make a claim - $1000
then excess for 'default of rent' (tenant not paying) - $500
then excess for 'loss of rent'when the property is being repaired as a result of 'malicious damage' - $500

When the scope of works came, it was 20k+ not including recarpeting yet!

 

that's all muddled up Beanie - did a property manager do the claim for you?
where is your property?

 

Beanie
are you claiming through landlord insurance, building insurance or both?
There are steps to this but it needs to be all done at once.
Are you with the right insurer?

 

The property is in Queensland.
My PM submitted all the paperwork to the insurance company and went to QCAT and got an eviction notice on the same day as the hearing. PM did a lot of work monitoring the property constantly to ensure violent male tenant left. Lady tenant already disappeared for 3 months having to leave one of her kids behind with him. Ugh! PM did police report as well because PM was uncomfortable to have a child in the care of someone like that.
PM oversaw 2 different repair companies - 1st company walked in, then walked out - too big for us, they said, plus we are not qualified to handle and repair asbestos walls
PM oversaw big renovation job by second company
But when it came to handling the claim, my husband wanted to talk to the insurers themselves

 

Because it's malicious damage, it's through landlord insurance
Could be the insurance company is not doing the right thing
One shot, the representative claimed $2000 in one hit at the start of the claim

 

We argue with them until we go blue in the face.

We had a siege in one of our Northern suburbs properties this year, around $10,000 damage to property, every window smashed (building insurance), as well as all lights, doors, there was a list of things.

The STAR police broke the front door to pieces to arrest the perpetrator who had a gun, no one was hurt but the property damage was extensive

We got front door and glass repaired as soon as police gave the property back to us - around 6pm through emergency maintenance.

Claim assessor came out, windows were accepted as being done and all the other damage was still visible, - the entire claim was awarded except the buggers discounted the $300 cost (or whatever it was) for the front door because "it was fixed before the assessor got there"

My admin staff argued the point - it's silly when you look at it, you can't leave a house without a front door waiting for an assessor to get there one week or 2 months later.

I was in my office for around 15 minutes today but as I was scrambling around trying to sort out things I need for tomorrow one of the girls called out that the insurance has now awarded the door - yay.

This was all one claim

In this case no bond claim - tenant is still in that property.

Where a bond can be used it should never be for rent arrears, use for non claimable items like unpaid water invoices, damage etc....

They award it in stages - that is normal but should be one big claim.

 

Zowie! That's drama for you!
Police siege and breaking down front door.
Please don't tell me it was in one of the Elizabeth suburbs, I have IPs there.
Is it Ingle farm or Pooraka? There was always some meth lab being busted there but I liked those suburbs for their price point and brick homes.

Yes, insurance is always trying to discount something,
Our assessor said the kitchen and hallway timber floors were badly scuffed and need to be sanded and re-polished. The insurer crossed that item off the list from the scope of works

 

Beanie - this one was in Salisbury (close)
Never a dull moment but I have to admit it was the first siege in 10 years. It was very scary in the 4 hours he was in the house with a gun.

Tenant has been there over 7 years, she is lovely. Here's the thing when screening for tenants - asking them how many psychos they have dated in the past is not part of the screening process.

 

@Xenia

How many times do you see a property manager doing an insurance claim for a landlord or tenant compensation so that the landlord can get some money for some minor discolouration’s on a benchtop?

Just curious.

MTR

 

Not often MTR
a lady that came over to us this month - from this forum - saw this yesterday and wrote me an email saying, this is the kind of thing she was so frustrated about with another property manager in Adelaide, brand new kitchen had burn marks and the laminate peeling off and the property managers called it "wear and tear"

they couldn't get their heads around the fact that this has now created a forward expense for the landlord that has to be paid some time in future and the landlord should at least be compensated in part - if not paid in full by an insurance claim.

Note - this is more doable with brand new houses or newly renovated houses because if they had a few scratches etc on them to begin with it makes it more difficult to get through.

 

Asbestos = old = cheap.

Cheap properties therefore have these types of tenants more than yer Taj Mahal - goes with the territory, sadly.

 

Nope, this property is in a desirable middle-class suburb in Qld
Property is now 550k - 600k
I wouldn't call the property cheap, Bayview
Only the bedrooms upstairs have asbestos, every other wall has been replaced with non-asbestos gyprock walls when we bought it. Downstairs built-in bedrooms, bathroom, lounge and kitchen is only a couple of years old by the previous owner....

 

Xenia, yes I've often wondered where the line is between 'wear and tear' and damage. Many landlords simply wear damages such as this. I know I have in the past, simply because a managing agent has been reluctant to pursue it with the tenant. The last phone call I got from a pm was telling me I had to pay to change a door handle which had broken. The door handle--as is the unit--is relatively new. I said no; that this was not wear and tear and the tenant would have to pay.