Natural disasters are unfortunate calamities that affect both renters and landlords. In the aftermath of the record-breaking 2020 Atlantic hurricane season and the seventh, powerfully destructive hurricane Sally, many landlords were left wondering if there was anything they could’ve done before and after such a natural catastrophe. However, hurricanes aren’t the only threat to our residential and rental properties. From wildfires to earthquakes, from preparedness for disasters to damage assessment, mitigating their impact and optimizing the lease, here’s what every landlord needs to know.
Identify potential threats
As a landlord who is renting out properties in the area, you should know what type of natural disasters may affect your properties and tenants. This narrows down your action plan in each case. However, no matter what kind of disaster, these five steps on the landlord’s side are universal: provide your tenants with information about possible disasters, make rental safer by trimming overgrown trees and installing hurricane blinds, instruct tenants to follow evacuation orders, assess the damage, and go through insurance claims.
According to the National Earthquake Information Center (NEIC), there are as many as 20,000 earthquakes every year, with Japan, Nepal, India, and Ecuador being the most earthquake prone countries in the world. Although earth’s crust tremors are difficult to predict, in the case of one or a succession of earthquakes, the tenants or landlord should shut off the gas and water supply valve, as well as the electricity mains switch. Tenants should be instructed to secure large objects from moving or falling both in the house and outside. After the earthquake, the landlord needs to assess the structural soundness of the property and make a plan for repairs.
Given its devastating effects, it seems that it’s never too early to start preparing for the hurricane season, with China, Japan, the Philippines, the U.S. and Mexico being most at-risk. The preparation begins with trimming damaged trees as well as those close to the building. Next, make sure the gutters are firmly secured to the building and free of debris so they can channel stormwater to the drains. All lightweight objects such as garden furniture, tools, and waste receptacles should be brought inside. If your property lies in a ‘tornado alley’, which is a region that often sees these short-lasting but destructive vortices, you should consider adding a safe room for the tenants.
Probably the most common natural disaster, especially in South Asian countries such as Bangladesh and India, floods can occur at any time of year. Caused typically by heavy precipitation, flooding can also occur as a side-effect of a hurricane and snowmelt. While there’s little a landlord can do to prevent flooding, make sure your insurance policy includes flooding, where your local emergency management agency can offer valuable advice. Apart from following the flood warnings, both from the crisis management center and ‘nature’s own’ such as flash floods, the tenants should be instructed to prepare an emergency supply kit as transport and electricity services are the first casualties of a flood.
Communication and insurance procedures
Great communication with your tenants is critical for solving problems caused by natural disasters. While local laws will impose different requirements for your responsibilities as a landlord, it’s important not to wait with filing insurance claims, especially if you own properties in certain regions such as Australia’s Victoria which happens to be particularly affected by a range of natural disasters that can strike at any given time without warning. The type and scope of assistance you’ll receive depends on your insurance policy. If you’re not sure what coverage best suits your situation, consult an insurance professional and, if needed, upgrade to home insurance VIC that is more tailored to protecting your rental property. Some packages even cover your loss of rent for up to 12 months, if your building is no longer safe for tenants.
Assessing the damage
Before letting tenants back into the building, the landlord must inspect the property carefully with a building inspector. These professionals will check for structural damage and hazards such as roof, chimney, and foundation deficiencies, as well as loose or broken power lines, gas leaks, or water leaks that can’t be detected on the surface. If you find standing water or any damage to the pipes, turn off the electricity and water supply until the immediate cause is identified.
Obtain a structural inspection report
In the disaster aftermath, the landlord is required by law to ensure that the rental property meets the building’s health and safety requirements. A structural engineering assessment can be arranged to determine if the building is still suitable for habitation. In New Zealand for example, the Residential Tenancy Act doesn’t require landlords to present their tenants with a copy, but this is nonetheless a common practice among landlords, so check your local legislation.
Damage vs. rental agreement
Depending on the magnitude of damage caused by the natural disaster, the tenant may want to remain at the property or choose to end the lease. In this case, there are several ways the rental agreement can be altered. For example, if the property is still in a livable condition, the landlord may temporarily reduce the rent until it’s fully restored to the previous state. If the tenants must move out until the repairs are made, the rent will be dropped until the tenants move back in. Finally, if no other option is available, the tenancy may be terminated.
Among all the steps you can take to limit the exposure and ensure quicker recovery after a natural disaster, as a landlord, you should work together with your tenants to make sure their property is safe. Whichever course of action you plan to take, it’s important to maintain the open line of communication in both directions.