Who should insure what in a rental property?
Category Rentals
As a significant financial asset, it is vital that your property is adequately insured against any unforeseen damage or loss. For landlords, insuring the rental property is not just a legal requirement but a prudent measure to protect their investment.
There are typically two types of insurance cover, namely homeowners' insurance (covering the building and fixtures) and household insurance (covering the contents of the home). It is important to regularly audit both of these insurances.
Landlord obligation to insure the property
The responsibility of a landlord to insure a rental property is guided by a combination of legal requirements and standard practices. Landlords are obliged to provide a safe living environment for their tenants, which includes ensuring that the property is adequately covered by insurance.
This would be in the form of Homeowners' Insurance covering the fixed structures such as the home, garages, outbuildings, swimming pool, fences, walls and gates against damage caused by unforeseen accidents and events such as a flood, fire damage, burst geyser and so on.
It is important to check what is covered. For example, in some policies only certain damage is covered in the case of a swimming pool. The addition of solar panels also requires coverage both in terms of damage as well as the possibility of theft.
In the case of a sectional title property, the landlord would insure the unit while the outside and common areas are covered by the scheme's insurance policy. Another often overlooked aspect is to ensure that there is fidelity cover included regardless of whether it is a freehold or sectional title property.
Tenant obligation to insure the property
While the Rental Housing Act and other housing regulations address various aspects of tenant-landlord relationships, including maintenance and property conditions, they do not specifically require tenants to carry content insurance.
Although the landlord is responsible for insuring the property itself, insuring the contents would fall to the tenant. Household Contents Insurance would provide cover for personal possessions within the rented premises against theft, damage and loss. In some instances a contractual obligation to insure the contents may be included in the lease agreement, but there is no legal requirement pertaining to insuring the contents.
Tenants should also be made aware of the procedure to follow in the case of damage such as the geyser bursting, flooding and so on in terms of liaison with the managing agent or landlord.
Insurance is a critical component of renting a property and provides financial security and peace of mind for both landlords and tenants.
Home is our Story and property our passion. Owning and managing a rental property can be complex which is why landlords and property owners trust Seeff to assist in securing a tenant, and often to also manage the property on an ongoing basis. Seeff has decades of experience with fully legally compliant documentation and procedures and a strong back office to ensure a smooth rental process.
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Author: Gina Meintjes
