If you have an investment in the residential property market there are some real exposures that you need to protect against. This was clearly evidenced by a recent decision in the Queensland Court of Appeal. A mother of four lived for 18 months with the fear of contracting HIV after being stuck by a needle while holidaying in a ‘filthy’ Brisbane apartment. She had begun cleaning the apartment three days into their stay after getting little response to her complaints about the dirty state of the room. It was while she was cleaning dirty and sticky internal stairs that a discarded needle, hidden by dust and fluff, pierced through a rubber glove and became stuck in her finger. The Court found that “a reasonable person (the landlord)… would have taken the precaution of properly cleaning the premises”. The Court found in favour of the mother and awarded her $494,750 in damages and costs.
Unit owners are required by legislation to pay body corporate fees, which usually include the cost of insurance. But Body Corporate (Residential Strata Title) Insurance does not provide cover for the assets or liabilities of individual unit owners. It is critical that these unit owners effect a Residential Landlords’ Insurance in their own names covering everything in their unit (even the painting on internal walls in some cases), their liabilities for damage and/or bodily injury to third parties. These policies should also provide optional covers for Rent Default, Theft by Tenants and Loss of Rental Income.
It was recently reported that half of the nation’s DIY landlords don’t have any type of landlords insurance at all, while a further 20% of investors who use a professional property manager are also uninsured. Landlord insurance is an inexpensive, tax-deductible policy that offers peace of mind for property investors – who, if they are sued, could lose everything. If you are in any doubt about what cover you need for your investment property, please contact our office for some advice.