Hi, last night we received a call from our real estate agent saying that our tenant had just called to say that there was a fire in one of the rooms and that "only the carpet had been damaged" our real estate agent has told us today that we need to pay for the repairs and that the tenant will not have to pay for any repairs. Is this correct
Pretty much so – get on to your insurers & find out what they will require eg police/fire report etc.
STOP: How did the fire start? I would suspect a naked flame (a candle). Wait for the fire department report. If it was started by the tenant, then they are liable to pay for all damages NOW. Do NOT wait to take it from their bond as there may be additional damages/unpaid rent/cleaning to do at the end of the tenancy.
If they refuse to pay, terminate the lease immediately after issuing a breach notice in writing via registered mail.
Do not be affraid of a gap in your lease payments as your rental insurance will pay for a rental period (usually up to 12 months) should 'deliberate' damage of more than $1,000 be sustained. You can argue that a naked flame is: A) a breach of their lease;
deliberate damage as it was lite by the renter and they neglected to properly manage a dangerous item, knowing that a naked flame can and will cause substancial damage.
At the very least, the renters will be responsible for any and all insurance excess.
Do NOT let your agent talk you into just using your insurance policy and for you to take any insurance hit…it means that they are not prepared to follow thru on recovering your loss from the renters. It means less work on their part.
The agent is also the ones that should submit the claim (if required) with the insurance coy but keep on their wheel with them submitting copies of all documents to you BEFORE they submit them; you may be stuck with wrong info if they get it wrong.
You will however be under a legal obligation to fix the damage ASAP (yesterday). If you fail to do that, the renters will be able to claim a reduction in rent (up to 100% in some cases) until trhe damage is fixed, even if they caused the damage in the first place.
You should also be aware that there WILL be smoke damage to ALL the paint work thru-out the entire house, in the carpets etc. Your entire house will need repainting and ALL the carpets will/may need 100% replacement as the smoke damage will have penertrated deep into the carpet (and will not be able to be removed, even if they are steamed cleaned [paid for by the renters/insurance coy]) or if the carpets cannot be colour matched (due to not being available or if the carpets are so old that they cannot be colour matched due to wear and tear and sun damage.Thank You both for the reply, Colin the fire was started by an old TV we have been told.
Regardless. The TV belongs to the tenant and thus the tenant is responsible.
Just a side question; do you have a safety switch? If not, would a safety switch have prevented the situation?
I've just gone through the process of installing new boxes with safety switches. It costs about $750 all up. Well worth it. I don't think I could sleep at night if there were an electrical issue that caused harm to one of my tenants.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Colin,
Great advise. Why a Property Manager would tell you that you are liable is really concerning. I’d be looking for a new property manager!
Holly
Not to worry, I fired them last Dec.
deliberate damage as it was lite by the renter and they neglected to properly manage a dangerous item, knowing that a naked flame can and will cause substancial damage.
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