Splitting the Costs of Fire Damage in Rental Properties

1/14/2021 (Permalink)

Fire damage in an apartment

As a rental property owner in West Valley City, UT, you have an obligation to maintain your properties, so they are safe and livable for your tenants. Your responsibilities are defined by the Federal Housing Administration, the Fair Credit Reporting Act, the Department of Housing and Urban Development, and a variety of other federal, state, and local regulations. With so many sources of regulations, figuring out where your responsibilities end can be confusing. For example, who is responsible for repairs following an apartment fire?

Responsabilities of Fire Damage in Rental Properties

Renters' Insurance

Your tenant should have renters' insurance; as a property owner, you can require that your tenants carry this protection. Renters' insurance covers:

• Tenant-caused damage to walls, floors, and ceilings
  
• Tenant-caused damage to appliances
  
• Flea extermination caused by tenants' pets
  
• Damage to the tenants' belongings in the fire-affected apartment
  
  

In most cases, you'll need to show that the tenants were responsible for damage beyond normal wear and tear.

Your Property Insurance

After an apartment fire, the costs associated with fire cleanup and repair are split between your own property insurance and the renters' insurance. For example, your tenants' insurance should cover the loss of their furniture, clothing, and other belongings. Your insurance should cover damage to the structural elements of the property. As the building owner, you should reach out immediately to fire damage remediation experts for inspections, cleanup, removal of soot, and related repairs.

Determination of Responsibility

This sounds pretty straightforward, but sometimes other factors influence who ultimately pays. For example, your insurance company may want to know how the fire started and what types of damage have occurred. Your insurance company will attempt to work with the tenants' insurance provider.

Remember the property owner is responsible for damage to the structure and the tenant is responsible for damage caused to the content of the building. If the apartment fire was caused by something the tenant did, they may be found responsible for additional costs.