I own 2 properties with a partner, properties are bought and deeded in our names.
I have read the many posts about trying to mitigate liability, etc and wondering if this could be done through a “property maintenance company/contract”. Putting together a contract with a handyman and notifying the tenant that any and all repairs/repair requests are to go through the handyman. The handyman would then collect payment as laid out in our agreement. I would pay him a small monthly fee to be “on call” 24/7, and in return he would give me low repair prices as agreed upon.
Would this add a significant layer of protection for myself and my partner. If something went into disrepair and a suit filed because of injury, etc, the liability would/should fall onto the contractor, correct?
No ,you are not transferring the liability to the contractor,because if he is negligent then so are you for hiring him. However you are doing the best that you can to provide a clean and safe environment for your tenants. These are two entirely different things. Because of ownership you will be ultimately liable for any problems. But this approach puts the requirement of proof on the tenant for calling maintenance,to address the problem. This should be your written policy that you give to all tenants so that when something does happen,you will have established a procedure for handling complaints and how to resolve differences.
Also make sure that you have an ironclad agreement with your contractor so that there are no misunderstandings on how to fix things and what the costs will be and when to contact you for direction.
Get the PM to indemnify you for his bad acts and make sure he carries enough insurance to do so. That and your own insurance will insure you against 99% of all judgments.
So: 1. make sure every detail about my contractors business is on the up and up.
2. Create an addendum to the lease outlining the exact procedure with which the tenant is to follow in case of emergency, need of repair, etc.
3. Have a proper agreement with my contractor outlining his responsibilities, duties, and price points. Also included in the contract would be his “guarantee” of his repairs and his accepted liability for work completed.
I am about 75% there. Just need to have things “tidied” up a bit.
This is maybe for a new thread, but what are the typical pitfalls or loopholes regarding your landlord insurance.