There are many possible problematic situations when it comes to being a landlord, a fact that deters many people from investing in property. Natural disasters are unfortunately becoming more and more frequent, and being prepared and educated for a variety of natural hazards is a must for landlords. Recent tragedies from Mother Nature include the wildfires in California in 2018. The Camp Fire in Northern California destroyed more than 13,000 homes and displaced approximately 52,000 people, totaling at least $ 11 billion in residential losses. Making sure you, your tenants and your rental properties are prepared and insured is essential for when disaster strikes.
Know Potential Threats
First off, knowing the area and type of natural disasters your properties would be prone to and the terrain they are located on will help you narrow down your plan of action. When it comes to natural disasters, landlords should always start with these five steps:
1. Provide tenants with preparation information.
2. Prepare the rental by trimming trees and installing hurricane shutters, if applicable.
3. Encourage tenants to follow evacuation orders.
4. Assess damages post-storm/fire.
5. Follow up with insurance claims.
All of these steps are general guidelines when it comes to natural disasters of any kind. Below, learn more about the disaster-specific actions you should be taking.
Wildfires
According to the one analysis, around “4.5 million U.S. homes were identified at high or extreme risk of wildfire” in 2017. Furthermore, in 2018, 58,000 fires burned around nine million acres across the country. If a wildfire is in an area close to your rental properties, here are some things you can do as a landlord:
• Provide resources for an emergency plan in case of an evacuation. This will include instructions on how to prepare the home and likely areas for tenants to evacuate to. Here is a handy checklist of what to do to give your property the best chance of survival (shutting off gas, removing curtains, etc.).
• Recommend an emergency supply kit. Consult a checklist like this one to learn what to include.
• Regarding renters insurance, remind your tenants to take photos of their belongings so there is a visual reference for the claims process in case of destruction.
Hurricanes
Hurricanes form over warm ocean waters and eventually move toward land. They can be threatening and extremely dangerous with heavy rainfall, powerful winds, storm surges, flooding, tornadoes and landslides. Hurricanes can occur along any U.S. coast or territory in the Atlantic or Pacific Oceans and affect up to 100 miles inland. September is the most active hurricane month, with hurricane season generally lasting from May to November. In preparing for hurricanes, landlords should consider the following:
• You and your tenants should visit ready.gov for information and resources that will help educate you about what to do and how to prepare a family plan, an evacuation plan and safety plan.
• Make it clear to your tenants if they are told to evacuate from the home or area, they must do so immediately. Reminding them to record any property damage with detailed and clear photographs is also important.
Floods
Flooding is the No. 1 most common natural hazard; it can occur any time of the year, at any time and in any part of the United States. Usually, flooding is caused by heavy precipitation, but it can also happen because of hurricanes and snowmelt. Many people don’t know that flood damage is not covered by homeowners insurance.
• As a landlord, you must make sure you have flood insurance. Explore FEMA’s guidance to understand more about flood loss avoidance.
• There are several types of flood warnings you and your tenants need to be aware of beforehand, such as a flash flood, which means you must get to higher ground immediately.
• Advise your tenants to have an emergency supply kit as water and electricity services are likely to be interrupted during a flood.
Insurance And Communication With Tenants
Taking the right precautions and preparing for potential issues with your tenants and your rental property will hopefully help minimize the damage. Good communication with your tenants is essential when it comes to problems like natural disasters. Lastly, and arguably most importantly, follow the law — different states might have different requirements for your responsibilities as a landlord.
Filing insurance claims is one of the most important things to do after natural disasters. Obviously, the type and amount of assistance you will receive will differentiate on what landlord insurance policy you carry. Consult an insurance professional or research the basics of landlord insurance if you are debating what type of coverage to have.
Furthermore, requiring your tenants to have renters insurance will be beneficial to them in this case so their belongings will be protected. Usually, landlords will require around a minimum of $100,000 in liability coverage. Additionally, in certain instances it could also help you cover deductibles. Your rental property might still be habitable, which would mean the lease is still binding. Treat your tenants fairly. If they are struggling financially, you can direct them to FEMA, where they can apply for individual disaster assistance.
It is important to remember that when so many people are affected by something like a natural disaster, the recovery process is likely to take a long time. Having patience will be important as well as having all your documentation in a safe place and backed up digitally to increase your odds of receiving the best compensation for damages.