Must tenants show proof of renters insurance?

Requirement may be added to lease only at certain times

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Q: My property manager is requesting we show proof of renters insurance. This is our second year in a lease with this apartment complex, but this is the first time we have been asked for proof of insurance.

I believe they are asking because we have made several complaints about the condition of our apartment due to a roof that leaked for a year before being fixed, and filthy carpet and mold in the apartment. Our complaints about the condition of the apartment led to a visit by the health department. If we do not show this proof of renters insurance, what could happen to our lease?

A: The landlord’s recent request for you to provide proof of insurance may or may not be related to your complaints and concerns about conditions in your unit.

While it very well could be that the property manager or the property owner were advised by the building insurance company to require proof of renters insurance because of your complaints about water intrusion from the leaking roof, it could also just be that the property manager or owner recently implemented a new company policy.

In my experience, many property managers and many sophisticated landlords require their tenants to show proof of renters insurance. I believe that it is prudent for you as a tenant to have a basic policy that will cover your possessions and have reasonable liability coverage as well.

You mention that you are on a lease and want to know the consequences if you don’t comply with the request from the property manager.

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First, you need to make sure that the "new proof of insurance" requirement was actually legally proper. Your property manager could not unilaterally add this requirement to your current lease, but could only make this change upon lease renewal or after the lease expires and converts to a month-to-month rental agreement.

It could also be possible that your lease always contained a clause requiring you to have renters insurance but the property manager simply didn’t require you to show proof of insurance.

Regardless, if your current lease does have a provision that requires you to show proof of renters insurance, then you must comply or you will be in breach of your lease and the property manager could seek termination of your lease. However, the most likely action they will take is to wait until the lease expires and not renew it.

You may think that you should simply do nothing until the lease expires and then get this coverage. That may work as far as not losing your rental unit, but remember that renters insurance offers you protections that the building owner’s insurance coverage doesn’t, so you are saving money but also not getting the benefits of the policy while also being in breach of your lease.

Q: A prospective tenant would like to rent a cottage on our property. The cottage shares the same entry from the main road, but because it is some distance from the main house we would like to know if we could ask the prospective tenant to submit to random drug testing as a condition of tenancy. We would then be able to "keep tabs on the goings on," as some rural rental properties in our area have attracted the wrong element.

The prospective tenant is known to us through friends, but we just want to make sure that there is nothing going on that we don’t know about. We also have heard about law enforcement seizing property where drug use is prevalent and we just don’t want to take the risk of losing our property.

A: Your goal of not renting to drug users and the concerns about potential seizure of your cottage if drugs are found by law enforcement is valid. But properties that are seized are usually isolated and owned by absentee and noninterested landlords who are willing to look the other way as long as they get a check in the mail.

You are a conscientious landlord and will continue to live on the same property in reasonable proximity to your rental cottage. It seems you have the ability to monitor the ingress and egress and could observe if there were unusual traffic patterns that would be indicative or drug trafficking.

The implementation of prospective tenant screening policies and practices that include credit checks and criminal background checks have become relatively standard with many large property management firms and the more sophisticated rental property owners.

But pretenancy screening to include drug testing of individual tenants is not a policy or practice that I have seen implemented to any great extent unless it is part of a specific housing services program.

These are specific programs that offer housing as part of a package of services or are aspects of an overall social services program, and these are entirely different than rental housing units offered to the general public as you are doing.

Then the idea of random drug testing after the tenant has moved in to the property is going even a step further.

While pre-employment drug testing has become accepted or even routine by some employers or in certain job classifications, the concept of random drug testing of employees is very controversial and fraught with legal issues or challenges if not properly handled from the time of initial employment through the actual implementation.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and "Property Management Kit for Dummies" and co-author of "Real Estate Investing for Dummies."

Email your questions to Rental Q&A at rgriswold.inman@retodayradio.com. Questions should be brief and cannot be answered individually.

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