Investment Property Owners and Flood Damage Responsibility

2/9/2022 (Permalink)

Flooding can cause severe damage to your building.

There is a significant draw to real estate for investors. Rental properties often provide a high reward, but profit is not without its fair share of risks as with any investment. However, tenants share the risk, so renter's insurance is often a crucial part of any move.

As the owner of the property, you have responsibility for the environment and structure of your facility. You do not, however, carry the burden for the personal property of tenants in most instances. A property owner must maintain several aspects of the building and facade.

• Ensure working utilities
• Maintain a livable environment
• Provide a clean living or working space

Keeping Up With Responsibilities

The responsibility of a property owner varies from state to state, but in general, Washington, NC, abides by federal housing regulations, protecting tenants from slum lords.

While you may keep up with standard maintenance around your building, you need to remember that prompt intervention after a disaster or other property damage is also your job. If you wait several days to fix a leak, you risk mold and flood damage. Depending on the speed of your actions, a judge may find you negligent, which is a costly judgment.

If you expect your insurance coverage to help reduce overall repair costs, you need to stay on top of issues. Any sign of delay can appear like negligence, and most insurers will not cover damage that results from ignoring a problem.

Knowing the Difference Between Responsibility and Fault

You may be responsible for repairing a building after a flood, but that does not mean that damage to a renter's property is your fault. If an external flood damages your building's structure, then contact your insurer to assess the damage, but if the same flood ruins a tenant's property, tell them to their renter's insurance provider.

Investing in real estate can lead to significant gains. Still, you need to know when a commercial insurance policy is necessary, and when a tenant's renter's insurance should foot the bill.