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How To Protect Your Rental Property Business From Lawsuits.

As a rental property business owner, you know it takes years to establish a brand reputation. You do this by…

How To Protect Your Rental Property Business From Lawsuits

16th March 2023

As a rental property business owner, you know it takes years to establish a brand reputation. You do this by building trust and goodwill with your tenants while providing them with exceptional service. Aside from that, you maintain high standards for their comfort and well-being. 

However, even with all these efforts in place, some risks can still come with living on your premises. For instance, if the floors are slippery or if there are items around the aisles, tenants could suffer from slip and fall due to imbalance. This premise accident could lead to brain injuries, hospitalization costs, and lost wages. While in other cases, it could be fatal since research shows that more than 33,000 victims died due to a slip and fall accident.

It could be costly if this happens inside your rental condominium or apartment building. A study shows that the recent settlement for the same accident is around USD$599,000 whereas a premises liability claim can reach up to USD$90,000. In short, this might lead to a loss of income. Worse, recovering this tampered reputation is costly and might bankrupt the business.

Safeguarding your business from any lawsuit is necessary to provide a safe rental establishment to its tenants while keeping it afloat. Here’s how to get started: 

1. Secure Landlord Insurance

A landlord insurance policy protects property owners from threats to their rental establishment. It is essential as it can protect against losses that might result from lawsuits filed against you by your tenants. Here are some of the threats that can affect your business: 

  • Property Damage: It results from a natural disaster, vandalism, or theft. For instance, a fire can destroy your rental home, and you will be liable for paying for the damages. It includes kitchen appliances or furniture inside the rental unit.  
  • Liability Coverage: It protects a property owner from a lawsuit due to accidents involving a tenant. For example, you’re responsible for hospitalization if they slip on the floor and get serious injuries. It also applies if the victim became incapacitated to work due to the incident. 
  • Loss Of Rental Income: This comes from unpaid rent if the tenant relocates as the property damage requires repairs. It means you’ll receive compensation for the loss of rental income during that period. 

With landlord insurance, you can ensure that your rental property business continues to generate revenue regardless of the event. 

2. Establish Rules For Tenants

As a property owner, it’s your responsibility to ensure the safety of your tenants. However, if you live in an area known for a high crime rate, this impacts the perception of prospective tenants. A 2019 study reveals that prevalent violence and property crime cause business failure because most customers and employees fear victimization. In short, crime can affect the stability of your business.

To avoid this, you can create rules for tenants before they sign a rental agreement. It may include the prohibition of pets, smoking, and other violations like illegal drugs or alcohol use on the premise.  

Consider screening the tenants before accepting them on the property. It ensures that all of them are suitable for tenancy and capable of paying rent. Without it, you’ll likely deal with late rental payment disputes or broken appliances. In addition, new tenants will avoid your building if they know you have a terrible image of allowing hostile people to live there.  

3. Schedule Inspections

The law requires landlords to prioritize tenant privacy and safety. It includes conducting regular property inspections to check its condition and ensure it is habitable and safe. It allows you to discover plumbing, flooring, and electrical issues before they cause damage or injury to a tenant. For example, suppose you aren’t aware of a leaky pipe until after it causes damage. In that case, you may be responsible for repairing or replacing the drywall in the damaged area.  

When having an inspection, you must inform your tenant about the schedule. However, if they refuse, you can push through with the plan. If they uphold the condition, the unchecked leaky pipes flood the whole floor. It affects the other tenants in the building, which might lead to injury claims.

4. Invest In Video Surveillance

In case of a lawsuit, you need reliable proof that you’re not responsible for the incident within the property. Thus, you must attach closed circuit television (CCTV) throughout the building, which serves as a deterrent for potential burglars or internal crime. 

You can use it to record all activity on site and prove that you’re not accountable for any incident. For instance, if the CCTV captures a previous tenant stealing items from your property, this will be enough evidence for your defense against a lawsuit claim. Moreover, you can also use this system to monitor other people who might be trespassing or damaging your property in any way. The footage will help you track them down and get them charged. 

CCTVs will also make your tenants feel safer, especially at night. In other words, you increase the chances of attracting more clients, hence higher revenue. 


Ultimately, rental property business owners like you should create a safe living environment for their tenants. It is especially true as a single accident inside the commercial premises could lead to costly lawsuits. And this could tarnish the image of your business, which cause your tenants to leave your property. 

Consequently, you must take preventive measures to avoid these scenarios. It includes providing surveillance cameras throughout the building and implementing regular inspections. You can also screen your new applicants before they move in so you can weed out the ones who could cause issues in the future. That way, all tenants will be surrounded by individuals who abide by the law, making them feel safe on the premises. 

Categories: Advice

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