P Contamination - Reducing the risk as a Landlord

11 May 2016

Being a landlord comes with dozens of unique benefits and advantages. However, if you aren’t careful, you may also open yourself up to unnecessary risks. The key is to protect and look out for yourself, above all else. Have you taken the time and effort to protect yourself from future issues, legal disputes, and problems with tenants?

For new landlords looking to protect themselves, it’s important to know where to look and who to trust. In most cases, you can learn the most from other landlords who have been in business for a long time. Specifically, you’ll want to find landlords in your area, as they are likely have a good understanding of local laws and regulations. Generally speaking, here are some of the top tips for reducing risks:

Everything goes in writing
Absolutely everything needs to be in writing. In real estate, it’s commonly said that if it’s not in writing, it doesn’t exist. This is the truth and should be remembered at all times. While it can be tempting to rush a lease agreement to a new tenant, you want to carefully ensure everything is included. From who can live in the residence and what activities are permitted, to when rent must be deposited by and how non-payments are handled, only what is written is enforceable.

Get the right insurance
If you wait until an accident happens or loss has already occurred, it’s too late. Get the right insurance policy in place from the start to protect yourself and your assets. These insurance policies require you to undertake prescribed obligations to care for the property and you should ensure you comply with these obligations. Also, encourage tenants to purchase Contents insurance. The more insurance there is, the less likely you or your insurer will be accountable for something that happens at the property.

Pay attention to the property
Again, waiting until something happens means it’s already too late. Keeping your tenants safe requires you to keep up property maintenance and ongoing issues. If something is broken or potentially hazardous, have it inspected and take care of it. As a landlord, you must comply with health and safety legislation. You are a person conducting a business or undertaking (PCBU) and therefore have primary responsibility to ensure the health and safety of those using the property for work purposes, such as repairers, tradesmen and others working at the property. More information about the Health & Safety at Work Act is available here, at the WorkSafe web site.

Don’t ignore tenants
No matter how frustrating a tenant might become you must always listen to them. If they claim something is broken or dangerous, attend to it immediately and take steps to prevent future issues. By not addressing something that a tenant points out, you are exposing yourself to consequences in the future.

Screen tenants
You can avoid many unnecessary risks by appropriately and effectively screening potential tenants. Instead of letting just anyone sign a lease agreement, make sure they are responsible. Do they have a job? Can they pass a background check? Do they have any prior history of evictions? These are all important questions to ask and research. Past behaviour is best way to predict future actions. When screening tenants, require them to provide you with three or more references. At least two of those should be former landlords because they are your best tool for gathering information. More information about choosing the right tenant is here.

Safeguard your business
While it’s great to get everything in writing, it’s only useful if you properly store and protect that information. If your documentation is in paper form, it’s best to store a digital copy as well. Additionally, keep important paper documents off the ground and protected from moisture. For digital files, it’s best to conduct regular backups and keep all virus software up to date. From an organisational point of view, clearly label all documents and keep files easily accessible

Handle evictions carefully
Ending a tenancy is a serious matter and should not be started without carefully completing all of the lease and legal steps required. Always consult a lawyer before evicting a tenant and ensure you have all written documentation in place before proceeding. Never threaten a tenant with eviction as a means of getting a rent payment; the regulators and Courts don’t look highly upon landlords threatening tenants.

Develop relationships with tenants
Sometimes it simply comes down to personal interaction. By developing a reputation as an approachable and honest landlord you can build trust and prevent circumstances from becoming confrontational. When there is a relationship tenants are less likely to file a formal complaint over a minor matter.


This advice is provided in our capacity as your insurance broker and not as your legal or property adviser. Our advice solely constitutes insurance advice and is not to be regarded as providing legal or property advice. If you require specific advice please consult your lawyer or property manager.

NZ Brokers - May 2016

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