Gradual versus Sudden Damage To Your Investment Property: knowing the difference
If you own a Northland rental property, you’ll need to do a mixture of occasional and regular maintenance to keep the place ship-shape so you can get the most value from its rental yield. Tenants need to contribute and watch out for damage occurring suddenly or by degrees.
Here is advice on how to tell the difference between gradual and sudden rental damage from Whangarei property management experts Rentals.co.
Obligations on tenant and landlord to note damage immediately
If a tenant intentionally damages the landlord’s property, the tenant must tell the landlord. The landlord can ask the tenant to repair the damage, or to pay the cost of replacement or repair. That’s straightforward.
If damage is caused by carelessness and the damage is covered by landlord insurance, the tenant will typically not be liable for the cost of repairs, unless it was the result of an imprisonable offence.
Gradual damage to a rental property is often excluded by insurance policies. The main culprit is water damage.
Say a dishwasher or a pipe under the upstairs shower has been leaking for months, but the leak couldn’t be seen. Then one day, tenants notice water stains and bulging in the ceiling below, and realise there’s a problem.
The insurer should be able to help you towards finding the source of the leak or overflow as well as responding to the damage. However an insurer like Vero, for example, says the homeowner would need to pay for repairs to the pipes or water fixtures to stop the cause of the problem.
Advice from Whangarei property management experts Rentals.co:
- Let your insurer know right away if gradual damage is detected. Knowing about the leak and failing to respond could lead to you not being covered by your insurer.
- If you are getting any plumbing or installation done around your home, make sure it’s done by a reputable tradie. If the plumbing or the installation of pipes or water fixtures is faulty, this may cause problems at claims time.
- If you think your home’s hidden pipe and cylinder systems might be leaking, check it out early before it causes damage.
It’s hard to get coverage on some of the following common problems.
- Uncovered part of pipes leaking: If a tenant doesn’t let anyone know a floor is squishy due to a leaking shower tray, the claim couldn’t or wouldn’t be paid. The reason is in this case the damage had to be from a PIPE, not the shower TRAY
- Flow-on effect from water leak: Damage caused by mould, fungi, mildew, rot, decay, gradual deterioration, micro-organisms and bacteria are often not covered because they are a gradually built-up problem
- Shrinkage or expansion of buildings, foundations or walls is often not covered – so keep an eye on these
But what if sudden damage leads to gradual damage?
If sudden damage (such as a storm damaging the roof) resulted in further gradual damage (rotten timber framing) the storm damage would typically be covered but the gradual damage to the framing would not.
And if gradual damage leads to sudden damage?
Say a pipe fitting corroding resulted in sudden damage when the pipe bursts and floods the house. The corroded pipe likely would not be covered, but the resulting damage from the flood would be.