The Federal Emergency Management Agency (FEMA) states that floods are the most common natural disaster in the United States. They can occur in any state, affecting all types of properties, including your rentals.
So, it's imperative that you understand what would happen if a flood damaged your rental property. In this article, we tell you what a flood is and what to do when it floods. We also discuss who is responsible for maintenance repairs after a flood.
Read on!
What Counts as Flood Damage?
Flood damage refers to any harm caused by water intrusion from external sources like overflowing rivers, heavy rains, or breached levees. It can seriously affect the building's foundation, staircases, and detached parts like garages. The damage can also extend to essential systems and equipment such as fuel tanks, water pumps, and solar panels.
Flooding is sometimes confused with water damage. While it causes significant water damage, flooding is still different from the typical water damage that is usually the result of internal issues within a property. These include leaks from plumbing, appliances, or malfunctioning systems like air conditioners or water heaters.
The water damage tends to be more localized, affecting specific areas of a property. In comparison, a flood causes bigger damage to multiple properties and requires coordinated restoration efforts from property managers (and authorities).
Immediate Actions to Take After a Flood
When a flood hits, both property managers and residents can take immediate action to save lives and even property.
Property Managers
As a property manager, you can:
- Warn residents of possible flooding and help them evacuate before the disaster.
- Ensure the property is safe before entering or allowing anyone else to enter. This includes checking for structural damage and potential hazards like gas leaks or electrical shorts.
- If the property is safe to enter, immediately shut off the main water valve to stop more water damage.
- If the property is uninhabitable, assist residents in finding temporary housing or consider waiving rent for the period affected by the subsequent repairs.
- Get water damage restoration professionals to handle the clean-up and necessary repairs promptly. Doing so fast helps prevent mold growth and further structural damage.
- Take photos and videos of the property to document the extent of the water damage for insurance claims and recovery efforts.
Residents
When a rental property floods, your residents should:
- Evacuate the house before it floods, and avoid entering the flooded property until it's declared safe. When a house floods, there's also the danger of health risks from contaminated water.
- Turn off electrical and gas connections if able to - especially after a weather-related flood.
- Notify the property manager immediately about the flood and the extent of the damage as they perceive it.
- Reach out to the renter's insurance provider to report the incident and start the claims process immediately.
- Remove personal property. They should also document all damaged personal property with photos and videos, which will be necessary for filing insurance claims.
Who Is Responsible for Flood Damage?
The responsibility for addressing flood damage in rental properties falls on both the property manager and the resident. However, the responsibility depends on the nature of the damage and the terms set out in the lease agreement.
Property Manager's Responsibility
As a property manager, you're generally responsible for repairs to structural damages caused by floods, including walls, flooring, electrical systems, and plumbing repairs.
It's an obligation to maintain the property's habitability, a legal standard called the ‘Implied Warranty of Habitability’. It requires rental properties to remain fit so residents can live safely and comfortably.
In addition, you must ensure that the property meets all local housing codes that pertain to safety and habitability. These can include providing adequate preparation for potential flooding scenarios.
When it floods, here are two instances you are supposed to handle repairs:
- Natural causes: If the flood damage results from natural causes such as heavy rains or natural disasters, you will be responsible for the repairs. This is under the premise that such damage would likely stem from a failure to maintain the property adequately against known risks - assuming no extraordinary natural event beyond normal expectations.
- Defects in the property: Any water damage resulting from pre-existing defects in the property also falls under your responsibility. This includes situations where improper maintenance or ignored repairs exacerbate damage during a flood event.
Resident's Responsibility
Residents are responsible for their personal belongings. To cover potential losses from floods, residents would need to have renter's insurance. The insurance covers a tenant's personal property that can be damaged by flooding. This is separate from the structural elements of the building.
It rarely occurs that the resident could be responsible for flood damage, especially after a natural disaster. But, a resident would be responsible for repairs if:
- They leave a tap running, which leads to an overflow, or they misuse plumbing fixtures in a way that results in water damage. The resident would be held responsible for the resulting flood.
- They fail to report a known issue, such as a minor leak, which later results in significant water damage.
Still, when we talk of a natural disaster, there are scenarios where a resident's actions could worsen the situation and potentially lead to liability. For example:
- Failure to prepare: If a resident fails to take reasonable precautions advised by the property manager or authorities (such as moving belongings to higher ground when warned of an impending flood), they might be seen as contributing to the extent of the damage.
- Improper action during an event: Actions like attempting to alter the property's plumbing or electrical systems during a flood - without proper knowledge or authority - could lead to additional damage, for which a resident might be held responsible.
- Ignoring evacuation orders: If a resident ignores evacuation orders, necessitating a rescue or emergency service, they could be liable for related costs or damages incurred during the rescue.
Reviewing the Lease Agreement
When giving your residents a lease agreement for your rental property, you want to have a few clauses that communicate what happens in case of natural disasters like flooding. Here are some key areas to focus on:
Damage and Repair Responsibilities
The lease should specify who is responsible for damage to the building's structure and the tenant's personal property in the event of a flood. It should clarify whether the landlord's insurance covers structural damages from floods and if tenants are required to carry renter's insurance for their belongings.
Alterations and Improvements
The lease agreement should provide residents with clarity on any modifications they can make to improve flood resilience, such as installing flood barriers - especially whether such alterations need prior approval from the property manager.
Evacuation and Access
The agreement should outline the procedures for evacuation in case of a flood. In addition, address access rights for the property management to enter the premises for inspection and repairs before and after a flood.
Rent Abatement
When reviewing the lease, discuss conditions under which you can reduce or waive rent - such as when the flood or water damage makes it uninhabitable.
Termination Clauses
A flood is one of the most sudden and accidental events, so you also want to have clear terms under which either party can terminate the lease due to severe damage from a flood. Include the notice period (and if residents can withhold rent) and other financial implications.
Communication With Residents
Effective communication with residents is essential, especially in managing the before or after of a flood. For starters, you have to inform residents about the flood. In your communication, focus on safety and the immediate steps you want them to take. Safe evacuation should be at the top of the list.
Then, if the property is damaged, you must regularly update your residents on repair timelines. Also, explain their rights regarding rent adjustments or abatements if the property is uninhabitable.
You can also assist residents in documenting losses for insurance claims and provide necessary paperwork.
Provide information on local emergency assistance and legal aid and establish a clear channel for residents to voice concerns and feedback.
Coordination of Repairs
Coordinating repairs after a flood involves several critical steps to ensure efficient property restoration:
- Quickly assess the extent of the damage and prioritize repairs based on urgency and impact on habitability. Engage professional services to inspect structural damages, electrical systems, and plumbing to ensure all assessments are thorough and accurate.
- Choose reputable contractors who specialize in flood restoration. It's important to work with professionals who understand the complexities associated with water damage and who can also adhere to local building codes and insurance requirements.
- Create a clear repair schedule, coordinating with contractors and residents to ensure minimal disruption. You also need to regularly oversee repairs to ensure they meet the set standards and timelines.
- Inform residents about the repair schedules, changes, and expected completion dates. Good communication helps manage residents' expectations and reduces frustration.
- Document all stages of the repairs, from initial damage assessments to the completion of work, including financial transactions and agreements with contractors. This documentation will come in handy for insurance claims and potential audits.
- Once repairs are complete, conduct a final rental property inspection to ensure all work is completed to a high standard. It's also important to follow up with residents to address any concerns or additional repairs necessary.
Managing Insurance Claims
If your rental property is in a flood-prone area, it makes sense to take out property insurance. But you first want to understand the specific coverages and responsibilities of flood insurance policies.
For Property Managers
As a property manager, consider having flood insurance that covers the physical damage to the building itself. The policy can also cover other aspects like loss of rent if the property becomes uninhabitable.
It's crucial to start the claims process immediately after the damage occurs by documenting its extent and contacting the insurance provider.
Policies generally have a waiting period (such as 30 days with the NFIP and possibly shorter with some private insurers), during which new policies cannot make claims, so continuous coverage is crucial.
Renter's Insurance
The standard renter's insurance may not cover flood damage. To protect personal items, residents should purchase a separate flood insurance policy, either through the NFIP or private insurers. This policy must state the circumstances under which they would cover the flooding.
After the flood damage, residents should document all damaged items thoroughly and initiate the claims process by contacting their insurance provider.
If they choose NFIP, the policies do not cover additional living expenses, which means renters should plan for potential costs related to temporary relocation.
Keep Repairs to a Minimum When You Use RentCheck's Inspection Software
It's good to mitigate the risk of flooding in your rental property. While you can't prevent natural disasters from happening, there are a few things you can do that would protect your property from the worst floods.
For instance, you can perform regular and simple property inspections. This way, you can keep the roofs, gutters, and plumbing systems in check. In addition, you would also know if you need to install a sump pump!
RentCheck is the ideal software to streamline rental property inspections. With the inspection app, your residents can complete their own inspections, keeping you updated every step of the way. Complete with itemized lists, reporting, and side-by-side comparisons, you and your residents can rest assured that no maintenance task slips through the cracks.
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