Rental Insurance also known as rental insurance, it is types of additional insurance purchased to protect against third party claim due to at fault in car accident, personal property contained in a rental unit from loss due to fire, theft, water damage and other circumstances. Specific terms of coverage are determined by the policy purchased from the insurer.
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Lease Purchase Clauses - Tenant Insurance & Property Condition at Move In
By W. Lewis Burger
I've been a real estate investor for over thirty years and I love selling a house on a lease purchase.
Tenant Insurance: Tenant insurance is very important and I never waive from this for several reasons.
Most Landlords own several houses. If there is a claim, your property insurance premium will sky rocket on all your properties. You as Landlord are responsible for everything that goes on at the property. If someone falls and hurts themselves, you are responsible; even if that person is a tenant, guest of tenant, whatever.
The Landlord must be added as an Additional Insured on the Liability portion the Renter's Policy. If someone is hurt on the property, this Renter's Policy will pay before the Landlord's policy. Most Renter's Policy have a $300,000 Liability clause but, will not cover the Landlord unless added as an Additional Insured. I insist the coverage is increase to $500,000, because I want it and I think $500,000 will cover a lot more than $300,000. The increase from $300,000 to $500,000 costs the Tenant very little.
You must have this before the Tenant moves in. Most accidents happen when moving furniture in and out of a house.
Also, most insurance agents are not aware the Landlord can be named as an Additional Insured and some Insures don't. Most do and you have to educate the agent. You may have to talk to the Tenant's insurance agent directly to get this done. I usually do.
Get it done before the Tenant moves in. I do not give them the keys until the insurance binder is faxed to me.
Also, point out to the tenants that you, as landlord, has property insurance but, this only covers the structure and does not protect the tenant's personal belongs. Tenant insurance will and it's not expensive.
Condition: Again, remember, this is Net Net Net Lease. Whatever 'repairs' you are going to do, do before the Tenant moves in and then the maintenance is the Tenant's responsibility.
In fact in Georgia, there must be a "Move In Inspection"; that list the condition of the property at move in. This must be signed by the tenant and landlord. This form is included in my lease available on my web site
Bottom Line: Tenant Insurance: Insist on it and do not let the tenant move in until you have the binder. Condition: Do the repairs before tenants moves in and agree (in writing) the property is in good condition at move in and no repairs at needed. There after, the tenant is responsible for all maintenance.
Below are the complete clauses from my lease and the complete lease is available at my web site.
Tenant Insurance: Before occupying the Property, the Lessee/Tenant must obtain a tenant insurance policy with liability coverage of at least $500,000.00. The Landlord/Lessor is to be named as an addition interest with notices mailed to the Landlord/Lessor at the address herein provided.
Lessee/Tenant's Initial: ____________ _____________
I get the Tenants to initial after this paragraph - make sure they understand
CONDITION: Landlord/Lessor as offered and Lessee/Tenant have accepted to take Property in its "as is" condition. Lessee/Tenant acknowledges receipt of the Move-In Inspection Form and accepts the Property in the condition listed. If the Lessee/Tenant shall find the conditions not as listed or listed incorrectly, Lessee/Tenant shall deliver to Landlord/Lessor a written statement of the discrepancies within one day from the signing for this Agreement. Otherwise, it will conclusively presume that the inventory and conditions are correct and the Lessee/Tenant will responsible for all loss, breakage, burns and other damage not designated.
W. Lewis Burger CCIM, has written many articles on real estate investing and self directed IRA's and has been an investor for thirty years. Mr. Burger is a CCIM (Certified Commercial Investment Member) designee. The forms and agreements on http://RealEstateFormsForInvestors.com were developed using this experience and hundreds of transactions. These forms and agreements are very detailed and strongly favor the landlord. If you are looking for a simple and cheap one or two page documents that are not written by an experience investor, do not visit my site. However, if you are serious real estate investor, don't want to get screwed by your tenants and willing to pay for my mistakes and experience, then my site is for you. Go to http://RealEstateFormsForInvestors.com now and get the tools you need to make more money in spend less time. All forms offer a money back guarantee
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