Vandalism by Tenants Insurance – A Must-Have

By Chris Westrop

It s astounding the amount of damage they could cause in such a short amount of time, said Sean Fyfe, a young family man with an investment property in Saskatoon. According to the National Post, he and his wife, Miranda, were left to tackle a huge mess left behind by renters in their Saskatoon home. They estimate that it will cost approximately $14,000 to repair the property.

Every inch of the house is damaged in some way reported Sean. The damage included broken appliances, doors were torn off frames, stained carpets, and unbelievably, gaping holes in the walls stuffed with garbage and rotting food! Hopefully, the owner had a home warranty plan from a service such as First American Home Warranty to make sure that they were covered from the damages the tenant did.

To add insult to injury, all this damage was done to a freshly renovated home, new paint and carpets, updated bathrooms and brand new appliances. Once again, they have to renovate the whole place and have someone such as this High Wycombe carpet cleaning company come and revert the damage that was done throughout the floors of the house.

Their insurance will not cover the damage, so the Fyfes had to max out their credit cards, and invest a lot of sweat equity to repair their home. We really weren’t in a position to afford something like this, Sean was quoted as saying.

This is far from the only horror story of this nature. Is there anything that real estate investors can do to protect themselves from a similar nightmare? Here are some essential tips:

1) Choose an insurance policy that includes Vandalism or Malicious Acts by Tenants Coverage. Many insurance policies do not include this coverage, but a few do. So, be sure to review your current policy and ensure you have this essential coverage. Not only that, but getting a policy like a ‘buy-to-let’ can help with other house repairs. For instance, one sure insurance or some similar service provider can offer additional cover like busted pipes, sudden leakage, pest infestation, rent recovery, etc.

As with all insurance policies, it is also important to understand what is and what is not covered under your policy. For example, there is a differentiation made between vandalism and slovenliness. While actual physical damage would usually be covered under a policy which includes Vandalism and Malicious Acts by Tenants coverage, items such as abandoned garbage and over-all uncleanness would generally not be covered.

2) Screen. Screen. Screen. This may seem obvious, but haphazard screening can result in unsavoury tenants who leave unwary investors with a nightmarish clean-up upon leaving. Make sure you have a comprehensive rental application form, and that you personally contact former landlords, employers and other references before renting your property out to anyone.

3) Conduct a move-in inspection with ALL new tenants. This report confirms the condition of the property prior to the tenant s occupancy and makes any new damage the obvious responsibility of the tenant.

4) Make regular visits to your rental property. Individual provinces will have specific laws regarding how often and under what conditions you can inspect a tenant s home. Become familiar with these requirements and then make regular legal visits to your investment properties to ensure that all is in good order.

Too much cannot be said about taking the above tips seriously. Vandalism by tenants is a serious issue that continues to plague many investors. Just ask Yolandi Lombard, a frustrated landlord that saw her tenant occupy her property for three months without paying rent and then left thousands of dollars of damage upon leaving. Not every breakage and damage is malicious, of course, it is normal to spill something on the carpets or for an appliance to break, this is just what happens with use. The landlord will need to accept that expenses like this will come out every now and then, and organize for a new set of white goods to be installed, or a Carpet Steam Cleaning Melbourne company or similar to come in and freshen things up, for example. Especially carpets, footfall is inevitable and with time can cause wear and tear. But in this case, it is completely different. Vandalism is the intent of breaking someone else’s property and causing as much damage as possible. This is not on at all, it’s an act of crime against the landlord and it really does highlight how important it is to reference check tenants, and pay regular visits to the property to ensure it is being kept in good condition.

According, to a recent CBC report, Lombard s home was allegedly left in shambles. Items including the fridge and microwave were missing, garbage was strewn around the house, and holes were punched in the walls.

Lombard said, I didn’t know people like this existed. I didn’t know that anybody would think it’s OK to treat anybody s house this way. Unfortunately, as this and other reports indicate, this type of tenant does exist and it is essential that investment property owners are aware of the dangers and take steps to mitigate these risks.

Chris Westrop is the Commercial Insurance Manager at Park Insurance. He has over 15 years of experience in the commercial insurance business and is a Chartered Insurance Professional with the Insurance Institute of Canada and a member of the Professional Liability Underwriting Society. He is also a REIN member and a regular attendee of many of our programs. He may be reached at (604) 659-3133 or cwestrop@park.ca.

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