Q: I recently caused a small fire and damage to my apartment by mistake. I was trying to get rid of some roaches and I didn’t want to bother the landlord so I went to the store and bought some of those pest-control foggers. Something went wrong and they created an explosion that blew my patio doors off the hinges and shattered the master bedroom window. Luckily, no one was injured and there was only minor fire damage to a limited portion of the kitchen. But I did have to stay away from the apartment for five days for repairs.
The contractors replaced the patio doors, the bedroom window glass, the hole in the kitchen wall from the fireman, and the kitchen floor. The apartment complex is charging me $1,233 for damages. Shouldn’t the landlord’s property insurance cover the damages? If their insurance does cover it then why are they charging me? I’m a desperate single parent and they want this money by Friday. What should I do?
A: I see this as a very straightforward situation in which you caused damage to the building and you should have had renter’s insurance. If you did, you could have turned over the claim to the insurance company and they would work with the owner and possibly the owner’s insurance company and take care of the damages. You may have to pay a deductible depending on the type of coverage you have.
As far as the owner’s insurance coverage, we don’t have any idea what coverage, if any, the owner of the building has for this type of claim. Typically the owner’s insurance covers the buildings but does not cover your personal property. You have not indicated that you have any damage to your personal property, but be aware that the owner’s insurance is not likely to afford any coverage. In most circumstances, the owner’s insurance will pay for the repairs to the building, but there is likely a deductible of at least $1,000 and as much as $2,500 or even higher. Thus, the owner is not likely to be reimbursed for the $1,233 in damage. Even if the owner’s insurance company did agree this was a covered loss and made the payment to the owner, the insurance company would seek subrogation (reimbursement) from you for causing the damage.
Unless you have some basis to show that the owner was somehow negligent and caused or substantially contributed to the explosion, then my personal opinion is that you are responsible and you should contact your landlord and make the necessary payment arrangements. In the future you should be sure to let your landlord know about pest-control issues rather than attempt to resolve them on your own. I don’t see your personal marital situation as having any relevance and there are many tenants with personal financial situations that may make it difficult to pay a lump sum. Hopefully, your landlord will be willing to work with you, and you can agree to a written payment plan.
Q: I really enjoy your column and would appreciate your advice. My mother wants to rent her house to my cousin until he gets on his feet. I know that this is not a good idea, but I am hoping that I can at least get my mom to put the agreement in writing and use a formal legal document because we know there will be problems. Where can I get a rental agreement or lease form?
A: I won’t touch the family-renting-to-family issue, and it seems that you are already predicting that this situation will not be smooth. But you are absolutely right about the importance of having the proper legal documents, and the fact that family is involved doesn’t lessen the importance of all agreements concerning real estate being in writing. I will strongly suggest that you get a rental agreement or lease form from either your local affiliate of the National Apartment Association or the Institute of Real Estate Management. It is a good idea to join your local NAA-affiliated apartment association just to have access to the forms as well as the tenant screening services and great educational programs. Have your local tenant-landlord legal expert review all forms before you use them, as tenant-landlord laws vary from state to state and even from one local jurisdiction to another.
Please make sure to suggest that your mother use the forms and include all aspects of their agreement in writing before your cousin takes possession of the home. You may even want to have someone witness the signatures, or you could even consider having the signatures verified by a notary public or similar service. Your mom should also have your cousin acknowledge the condition of the rental house at move-in so there is no doubt about its condition and the responsibility for any damages evident upon the termination of the tenancy.
This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and co-author of "Real Estate Investing for Dummies."
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