Residential Property Management/Question Risk Mgmt Rental Condo
I got the following questions with reference to risk management and renting out of my condo. Before renting out the condo I am trying to brainstorm all of the risk involved and find ways to manage it.
Lets says that I am renting out my condo and I dont have a property manager. Instead I plan to hire a handyman to repair appliances etc.
In the lease agreement I specified that I am responsible for appliances / electrical system of the home.
In the event that I hire a handyman to repair my appliances / electrical system in my home and he does something wrong and the appliance malfunction. Lets say it causes a fire and then as a landlord I am responsible, yet it was not my fault. Or lets say that the tenant overloads the electrical system in the condo that causes fire and then I am deemed responsible for the fire even though it was not my fault.
In these instances what can I do as a landlord to protect myself from liability arising out of 1. mistakes / negligence by handyman on appliances / electrical system and 2. negligence by the tenant ie. overloading electrical circuits etc.
What are the different ways to mitigate this risks?
In the case of hiring a handyman, you would be better off hiring a maintenance company that carries the appropriate liability insurance coverage. That way if they were to cause damages to property or persons, their insurance policy would cover that (up to the limits of the policy).
For the possibility your tenant could do something to burn the house down, there's really not much you can do to transfer the risk to a residential tenant. The lease language should contain the appropriate provisions to limit your liability as a landlord, but a residential tenant is not likely to have the financial strength to cover such an event even if they are responsible. You would of course have your own insurance policy in place. Additionally, it is wise to require or at least recommend your tenants to obtain their own renter's insurance policy which would at least cover their personal items.