New Year’s Eve is traditionally when people reflect on the year past and what the next 12 months may hold. It’s also a time when people let their hair down and revel!
Hosting NYE parties, and entertaining in general, can expose investment properties to a few risks. And while most would rather be a party-popper than a party-pooper, a bit of pre-party prep by landlords and PMs could save you a post-party headache.
Here are the top five things you and your landlords can do to ‘party proof’ an investment property:
If a rental is going to be party central, or even just fit for entertaining, it’s important to make sure the home is safe.
Pay particular attention to the condition of balconies and outdoor decks, railings and stairs, pools and spas (you may want to advise tenants they should restrict access to these if they are hosting a party), lighting and all the ‘ways’ – walk, drive, entrance. If repairs are needed, get them sorted before they pose a risk to number
Landlords and their agents have a duty of care to tenants and anyone else legally on the premises including party guests.
That duty means you must ensure the property is safe and fit for use. If a tenant or a guest is injured, or worse, or has their property damaged as a result of an incident for which the landlord is at fault, then they may be able to seek compensation.
Landlords need to ensure they have sufficient legal liability cover. As the landlord’s agent, you also need to ensure you have adequate cover in case blame for an incident lands on your shoulders (‘you never told me there was a problem with the…’).
It is also wise to let tenants know they also require liability cover in case there is an incident for which they are responsible at the rental (occupiers’ liability).
They can look at a stand-alone policy or should have legal liability cover if they choose a tailored renters’ contents insurance policy like TenantCover (up to $10 million). No-one wants to be nursing a legal hangover in the New Year, so make sure everyone’s liability cover is in check.
It’s a time of year when there are lots of people out and about, catching-up, party-going – leaving doors unlocked so everyone can ‘just come on in’. And that can make it easier for thieves to wreak havoc.
A reminder about security basics wouldn’t go astray and it’s important that any security measures in place at the property, like door and window locks, roller doors and shutters, are in good working order (see number 2 again).
4. Accidental damage
Over-enthusiastic ‘floss’ing (or getting a groove on doing the robot, for the old-school) in a crowded room, toasting everyone and everything when a bit happy, passing around platters laden with canapés and sparklers – entertaining can increase the risk of accidental damage.
If things get broken, stained, burnt, chipped, ripped or destroyed, the tenants are responsible for repairing or replacing the damaged items.
Despite this, it is important that landlords have an insurance policy that covers accidental damage in case the tenant fails to make good.
5. Malicious damage
Sad fact of life: parties can get out of hand with uninvited guests, drink or drug-fuelled behaviour, overcrowding or as a result of annoying the neighbours and things turning nasty.
This is especially true if the rental is a holiday let or being leased via Airbnb (‘pop-up parties’).
If you don’t believe things can go very wrong at a rental, you might like to check out the story of one New York homeowner who ended up cursing the day he listed on Airbnb and had his home trashed by 300 NYE revellers.
Although tenants are responsible for any damage caused, it can sometimes be difficult to recoup the expenses from tenants as the costs may be extensive or the renters leg it.
A landlord insurance policy with malicious damage cover could prove invaluable if the investment property is trashed and the landlord is left not only holding the rubbish bags but the financial bag.
With a bit of front-footing to make sure all these bases are covered – and knowing the landlord has great insurance cover in place – there’s no reason to become a killjoy and put a stop to tenants ringing in 2020 (BTW: unless it is stipulated in the lease agreement, you can’t prohibit tenants from having parties or guests to stay).
It will also help ensure your New Year gets off to a drama-free start too!
At EBM RentCover we don’t just offer landlord insurance, we offer outstanding client support. And while we hope you never run into trouble, if you do, we’ll be there.