Despite the many upsides of owning and renting a residential property, there are also several risks of being a landlord.

Here are seven common liability risks landlords face:

1. Third-Party Bodily Injuries

You can be liable for anyone who steps onto your rental property that is injured – a tenant, one of their visitors, or a delivery person. For example, if someone trips on an uneven entrance into your home or apartment building or slips and falls because of ice and snow that hasn’t been cleared, you could be held responsible for the injured individual’s medical and related expenses, such as their loss of income due to the injury.

Liability risks rental property landlords face

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2. Tenant Property Damage

If a tenant’s personal belongings are damaged by an incident or accident that arises because you neglected to maintain the property, you can be responsible for paying for their losses. For instance, if you fail to fix water leaks, have structural issues to the property addressed, or clean up mould that’s discovered.

3. Health-Related Hazards

Hazards that can severely affect your tenants’ health are another considerable risk. So, suppose your building or home contains lead-based paint or asbestos. In that case, you need to disclose that information to your tenants or prospective tenants and take action to prevent their exposure to it and have those toxic substances removed.

4. Damage to Rental Properties

Unexpected incidents could inflict significant damage on your rental property. For example, fire is one of the most common causes of property damage. So is the risk of a water leak because of a burst pipe. There’s also the possibility of a natural disaster or damage due to theft or vandalism that causes expensive harm to your property, resulting in lost income if the property is uninhabitable until repairs are completed.

5. Wrongful Evictions

Following the laws and regulations in your municipality or province governing evictions is vital. You cannot evict a tenant without proper notice or a valid legal reason. If you do, you can be sued.

6. Pet-Related Liability

If you don’t want your tenants to have pets while living in your rental property, include that in your lease agreement and advise them in advance. You can be held liable for any injuries or damages to another person or their property that a tenant’s pet causes.

7. Inadequate Insurance Protection

Get a landlord insurance policy if you’re getting into the rental property business. After all, there are significant differences between landlord insurance and homeowner insurance. Furthermore, knowing what your landlord insurance coverage provides and what is excluded is critical to ensure you’re adequately protected.

Damage Checklist for a Rental Property

Taking effective action to prevent damages or accidents from happening at your rental property means creating a damage checklist to ensure you address the most frequent risks any landlord faces and conducting a walkthrough of the premises with your tenants before they move in and out.

Here are six items to have on your checklist that both you and your tenants should sign after doing a walkthrough:

1. Check the condition of every room

In each room of the living space, carefully inspect the floor, walls, ceiling, light fixtures, doors and hinges, closets, electrical outlets and switches, and windows, screens, and frames. If the property or rental unit has stairs and handrails, ensure there are no cracks or chips in the stairs or loose railings.

2. Safety equipment

Ensure smoke and carbon monoxide detectors are working correctly. There should be a fire extinguisher in your rental unit. Check its pressure to make sure it is adequately charged.

3. Kitchen appliances

Ensure the refrigerator, stove, dishwasher, and other kitchen appliances are clean and in working order. If your rental unit includes laundry facilities, ensure the washing machine and dryer are clean and working as they should. Also, check all the hoses and seals attached to every appliance that uses water or gas.

4. Plumbing

Inspect all faucets, sinks, drains, toilets, and bathtubs for leaks. Also, check the water pressure to ensure the water is flowing as expected from every faucet.

5. Cabinets, countertops, and drawers

Look closely at any cabinets and drawers to check for insecure hinges and handles by opening them. Also, look at the kitchen countertop for damage, such as chips or loose boards.

6. Entrance and walkway

Ensure the main entrance is in good condition, and there are no trip hazards. Inspect the door, lock, and door lining to ensure they’re not loose or need to be replaced.

Also, take note of any unique features your rental unit may contain. For instance, if there’s a balcony, backyard, or garage, thoroughly inspect these for any signs of deterioration or damage.

What Insurance Do Landlords Need?

Every landlord who rents a home, apartment, or room should have a customized landlord insurance policy to cover damages or losses that may occur. 

A homeowner’s insurance policy is not designed to protect you from expensive accidents or incidents that occur in or to a rental unit. Encouraging your tenants to purchase a tenant or renter insurance policy to cover their personal possessions is worthwhile. Your landlord insurance policy does not include coverage for your tenants’ belongings.

Fill out our online application for a free quote. Our brokers will shop our partner network of over 50 Canadian insurance providers to find the low-cost coverage you need and tailor it to suit your requirements.

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About the Author: Alexandria Anthony

Alexandria Anthony is the Team Lead, Property & Hospitality, at Zensurance.