Landlord Insurance FAQs

Cathy from Burleigh has asked a question…

[blockquote]”I lease my property privately and haven’t renewed the lease agreement so the current tenants are on week to week. I have been told that unless there is a current lease agreement and a bond in place, the landlord insurance I pay is not valid?”[/blockquote]

Cathy, yes I have to agree. There are a couple of points to cover with this question. Firstly the week to week, you as the owner can accept any notice you like from the tenants but the RTA act states you must give your tenants 2 months notice of any change in tenancy, i.e. rent increase, change of any conditions in the lease agreement and the like. Whereas the tenant is only required to give you 2 weeks notice to vacate. If you wish them to vacate or any other substantial change in the tenancy you must state the changed details in a full lease and have all parties sign the agreement. Mutual consent comes in to play here, as long as you and the tenants agree, and its in writing its all fine.


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The RTA also states that a bond is not compulsory if both parties agree, but is it there for your (landlord) protection. The bond is to be used to finalize the property after the tenants have moved out, cleaning, carpet cleaning, pest control and any repairs needed that have been cause by the tenants during the tenancy. The bond is not supposed to be used to clear rent arrears. Most Landlord insurance policies will treat the bond as an excess so if there is no bond in place I believe the policy will be void. So you may lose out on a claim because the bond was not in place to be used to finalize the tenancy.

The lease agreement is protection of both parties rights and responsibilities, and yes if you have a landlord protection policy in place, check with your insurance company for the conditions of your policy, most policies will require a fixed term tenancy agreement in place to maximize protection. Some policies are only available through licensed real estate agencies acting as agents. Most banks provide a policy with coverage when you take out a mortgage for an investment property but they usually have many restrictions. So check the fine print, you may find your cheap policy has an excess of 4 weeks rent for each incident associated with the termination of the tenancy. For example rent owing will incur an excess of 4 week rent, cleaning, pest control and carpet cleaning another excess and any damage another excess so what started as a cheap policy is suddenly a very expensive exercise.

Do your home work, Contact the RTA (Residential Tenancies Authority) for advice or call a First National office for any information you need.

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