Tenant representation

Renter Requirements

Study reveals landlords' opinion on multifamily tenant liability.

Is it landlords’ responsibility to make sure all tenants purchase renter’s insurance? It should be, according to a LeasingDesk Insurance Services study. Multifamily landlords who insist their tenants purchase renter’s insurance save significantly on costs related to tenant damages, the study revealed. “The multifamily industry is the only industry that does not require renters to accept liability for damages they may cause. By not protecting themselves against resident-caused damages, owners are exposing themselves to unnecessary risk,” says Dirk Wakeham, president and chief executive officer of LeasingDesk Insurance in Irvine, Calif. Renter’s insurance accounts for a savings of nearly 80 percent in repairing renter-caused damage, or $4.29 per unit, according to the study. Other findings include:

  • More than half (55.32 percent) of the multifamily property management companies, representing 3,532 multifamily properties nationwide, track tenant-caused damages.
  • Forty-five percent report that they offer no insurance to their tenants, while 30 percent offer renter’s insurance at all of their properties, and 25 percent offer renter’s insurance at some of their properties.
  • Twenty-five percent of respondents require tenants to purchase renter’s insurance at all of their properties, and close to 15 percent require it at some of their properties.
  • Of those landlords who offer tenant insurance, nearly half “absolutely” would recommend a similar system to other landlords.
  • Currently, 67 percent of landlords who do not offer renter’s insurance are interested in doing so.

Carolyn Bilsky

Area report is written by Carolyn Bilsky, associate editor of Commercial Investment Real Estate. Contact her at (312) 321-4507 or cbilsky@cciminstitute.com.

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