What would happen if your property was the next Opal Tower?

When news broke of Sydney’s Opal Tower in late 2018, landlords and property managers across Australia shared a collective shudder.

While it’s common for things to go wrong in a rental property – whether it’s a tenant skipping rent or causing accidental property damage – the story of cracks in this high-rise residential property took the risks as a property manager to a new level entirely.

The reality of property management today is that emerging risks are plentiful. From the increasingly common issue of poorly constructed buildings (such as the case of the Opal Tower), to injuries to guests at an unauthorised party held at an Airbnb property or an illegal meth lab on a rental property.. let’s just say it’s a challenging time to be a landlord.

Perhaps most devastatingly, the Opal Tower situation has revealed to us first-hand the damage that can be caused when landlords are not appropriately insured. As owners of Opal Tower apartments have been frantically chasing tenants for rent – tenants who are not actually able to live in the building while cracks are present – the value of landlord insurance has become increasingly visible.

So, what can you do to ensure you’re protected against whatever risks might face you and your properties?

PROTECT AGAINST THE COMMON AND EMERGING RISKS

There are a number of obvious things that landlords and property managers can do to reduce risks, like screening tenants, monitoring rent collections and ensuring that bonds are lodged correctly. But what is 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:

1. 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.
2. 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.
3. 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.
4. 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.
5. Keep your property management staff up-to-date:
   If you manage a property management team, ensure that 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.

THE FINAL PIECE OF THE PUZZLE: INSURANCE

Putting in place these strategies can help you to minimise risk, however it’s impossible to eliminate risks all together. Mistakes are a fact of life, and as we’ve seen with the Opal Tower, it’s impossible to protect your rental property against every possible scenario.

That’s where Landlord Insurance can help; it can provide you with some cover for the common risks associated with your rental property – the final piece of the property management puzzle.

If you have any further questions regarding your rental property and minimising the risks, give Selena a call on 0427 154 966.

Source: reiq.com