Powered by MOMENTUM MEDIA
realestatebusiness logo
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

news image

‘Staggering’: Sydney vacancies reach record highs

July 10, 2020Grace Ormsby

COVID-19 is continuing to wreak havoc on vacancy rates in Sydney, with vacancies up for the fourth consecutive month. ...

REB_top100agents
top 10 agents

1

Alexander Phillips

Year of Experience: 20

Support Staff: 3

Residential Properties Sold: 215

Total Value of Residential Properties Sold:

$ 522,477,791

VIEW COMPLETE REPORT

Have you experienced sexual harassment or bullying in the workplace?

Yes, I've been the victim of sexual harassment (15.8%)
Yes, I've been the victim of workplace bullying (21.1%)
No (63.2%)

Total votes: 19
The voting for this poll has ended on: April 30, 2020
TECH MARKETING SALES BETTER BUSINESS PROPERTY MANAGEMENT
Openn Negotiation NZ reb Real estate platform broadens national scope

A local real estate sales platform has expanded its horizons to Australia’s easterly neighbour. ...

online house buying reb Agents urged to upskill bidders and vendors on rea ...

With virtual online auctions in full steam ahead during the pandemic, one company is encouraging agents to embrace tec ...

real estate online reb Real estate platform posts 55% growth year-on-year

realestate.com.au has set a new record, increasing its audience by 55 per cent year-on-year. ...

pile documents reb REINSW launches own contract creation tool

A new online program is set to revolutionise the sales process and get properties to market quicker than ever before, ac ...

Tom Panos Live 090720 What’s Making Headlines – The week concluding ...

What’s Making Headlines is your new source for all the very latest in Australian real estate news. ...

Courtney Caulfield wEB Servicing Brisbane’s high-end market

Despite only having four years behind her as a real estate agent, Courtney Caulfield from Place - Kangaroo Point has qui ...

Tom Panos Live 020720 What’s Making Headlines – The week concluding ...

What’s Making Headlines is your new source for all the very latest in Australian real estate news. ...

Fiona Blayney WEB How this thought leader has weathered the COVID-19 ...

According to the recipient of this year’s REB Awards Industry Thought Leader of the Year, the global pandemic has prov ...

Tom Panos Live 090720 What’s Making Headlines – The week concluding ...

What’s Making Headlines is your new source for all the very latest in Australian real estate news. ...

Courtney Caulfield wEB Servicing Brisbane’s high-end market

Despite only having four years behind her as a real estate agent, Courtney Caulfield from Place - Kangaroo Point has qui ...

Tom Panos Live 020720 What’s Making Headlines – The week concluding ...

What’s Making Headlines is your new source for all the very latest in Australian real estate news. ...

Fiona Blayney WEB How this thought leader has weathered the COVID-19 ...

According to the recipient of this year’s REB Awards Industry Thought Leader of the Year, the global pandemic has prov ...

Positive Mindset in Business reb The impact of a positive mindset in the business o ...

Let’s be real: running a business or an office is stressful. Here’s a quick rundown of some insights on keeping yo ...

Cameron Black reb Lies and statistics: Has the property market actua ...

It seems like there has been a huge change of sentiment in the last month as a confluence of factors has come together t ...

short 850x400 june2019 How to get that big win

Getting a big win is more than just sales. It involves strategic planning and setting goals, according to real estate bu ...

MeganSmith 050719 cropped Ray White’s Megan Smith sells $14m property in B ...

Ray White Balmain sales dynamo Megan Smith has sold one of the most expensive houses in Australia this year, with the pr ...

apartments Brisbane reb Who lives in apartments?

Almost half of all apartments in Australia are rented out, according to a new report which shines a comprehensive light ...

Echuca Victoria aerial reb Regional town remains resilient despite COVID-19

Despite falling prices in many of Australia’s capital cities, a regional area is showing signs of growth, an industry ...

Perth aerial new reb October blowout predicted for Perth rentals

In good news for Perth investors, experts are predicting a “major blowout” for rent prices in the capital city once ...

Coronis reb Coronis cracks into Victorian management marketpla ...

The Coronis Group has welcomed two new partners to the fold, moving the brand closer to its goal of nationwide expansi ...

EVENTS
REBAWARDS Listready
Real Estate Business Awards 2020

The REB Awards is the benchmark of success in the Australian real estate industry. It reflects not only the business astuteness of the country’s leading real estate operators and networks..

Learn more >
FROM THE WEB
Recommended by Spike Native Network
Do you have an industry update?

Knock, knock. Who’s there? No one…

01 February 2019 Sharon Fox-Slater

Summer vacation time usually heralds a big changeover in tenants, but beware — if the property is unoccupied for a while, the insurance may no longer be valid.

This is the case no matter whether the rental property is sitting vacant, by design (e.g. it is aimed at the student market, being renovated or purposely left empty for other reasons) or by circumstance (e.g. taking longer than expected to rent, needing extensive repairs or occupied by a lone tenant who is away from the property for an extended period such as during medical treatment or travelling).

At the end of school year, there is the exodus “home” for international students, and for families, the looming new school year often means moving to preferred school catchment areas. New year can also mean a new job, necessitating a change of locale for tenants. It is a time when many landlords will take the opportunity to renovate their rentals too (and a heads-up: if your landlord clients are renovating their property, they need to let their insurer know, as policies generally don’t cover the premises while works are taking place).

What is considered “vacant” or “unoccupied”?

Advertisement
Advertisement

• Vacant = the property is entirely empty, without any personal property inside
• Unoccupied = the property has been left ready for the occupants to return

Note: Within this article, the terms are interchangeable. However, for many insurers, the definitions can have differing impacts on cover and premium costs, and policyholders are urged to refer to their PDS.

Depending on the insurer, it is considered reasonable for there to be short stints of vacancy should one tenant move out and another move in, but what is considered reasonable varies, so policyholders need to refer to their insurance for specifics. Your landlords should also check their policy to see if they are required to notify their insurer each time their rental is left vacant due to a change of tenant — some landlord policies specify this.

While short periods of un-occupancy may be accepted by the insurer, most will likely consider the situation differently if a tenant moves out and there is no intention of replacing them (e.g. the landlord wants to renovate or sell the property). In which case, the policyholder needs to speak with their insurer about cover options (e.g. vacant dwelling policy), as a landlord policy may no longer be appropriate.

What happens if the rental property becomes vacant/unoccupied?

There is an exclusion in most landlord insurance policies (and home/building covers too) which relates to the premises being vacant or unoccupied. While the specific number of days may vary — often between 30 and 90 days — most policies cease to apply once the property has been empty for the specified period.

If the property is vacant for longer than the policy allows, one of two things could happen:

1. The insurer may impose an additional excess on any claims that arise while the property is unoccupied.
2. The policy may be cancelled.

What is the issue with the property being vacant/unoccupied?

Insurance is all about risk. When a property is unoccupied/vacant, it’s a prime target for burglars, thieves and vandals — there is an increased risk it could be used as a “squat” or clandestine drug lab, or suffer malicious damage.

Events that may only cause minimal damage if the property is occupied, and someone is there to look after it, can result in much more serious damage if there’s no one at home. When there is no occupant, the landlord and agent may not get to the site quick enough to protect the property against fire, storm or other weather-related perils. As an example, if a water pipe bursts, the tenant can turn off the mains and call the agent/landlord to arrange an emergency plumber. If the premises are unoccupied, there could be extensive damage before anyone notices the problem.

What is the insurance implication?

To minimise their exposure to this increased level of risk, insurers impose terms and conditions on unoccupied property.

A vacant property can require either an endorsement or a separate policy, depending on the insurance company, and some will not insure vacant homes at all. For insurers that will take on the risk, coverage limits and premium costs for unoccupied and vacant homes vary, based on how long the home will be empty and the steps the owner takes to protect the property, such as installing smoke detectors and alarm systems or engaging a property manager to keep an eye on the premises.

In most instances, if the insurer agrees to cover, the policy will only cover standard perils such as fire and wind, but not perils such as water damage due to burst pipes, glass breakage or vandalism. They may also impose additional exclusions and restrictions on the policy; for example, it may be a requirement to ensure the premises is kept in a “lived-in” state.

What do my landlords need to know?

It’s a requirement under cover to notify the property’s insurer if there is any material change at the premises — and this includes being unoccupied for an extended period. Failure to do so can void the policy and leave the owner at risk of having no compensation for property damage caused by fire, water or other perils. 

Generally, the policyholder must obtain the insurer’s written agreement for full cover to continue. It should be noted that applicable excesses usually increase when premises are unoccupied.

Your landlord’s insurer needs to be aware that the property is vacant so they can determine if they will extend cover, under what terms and conditions, at what premium and for how long.

If a property on your rent roll is vacant, ensure your landlord checks whether they have insurance cover for the property. It’s an oversight that could prove very costly.

BTW: Landlord insurance does not cover loss of rental income while the property is vacant, except in very few circumstances, such as when it relates to another claim (e.g. broken leases or extensive damage). Not being able to get a tenant is a risk that the landlord (and their agent) must assume, and one that can’t be mitigated by insurance.

Knock, knock. Who’s there? No one…
sharon fox slater 250x250 aug2018
lawyersweekly logo
Sharon Fox-Slater

Sharon Fox-Slater

Sharon Fox-Slater is the Managing Director of EBM RentCover, which protects more than 150,000 rental properties across Australia. She commenced a role with EBM back in 1993 and was part of the core team that helped launch one of Australia’s first landlord insurance policies into the market. She was also the first woman in Australia to complete the Advanced Diploma in Insurance Broking, and is well equipped to educate property investors and property professionals about the value of aligning with a specialist landlord insurance provider.

FROM THE WEB
Recommended by Spike Native Network
Do you have an industry update?
REAL ESTATE BUSINESS NEWSLETTER
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.