Why routine inspections are important

Did you know that if you fail to conduct regular inspections at a rental property, it can lead to an insurance claim denial? We explain…

Routine inspections at rental properties are crucial. They can help to ensure the property complies with local safety and housing regulations, avoiding legal issues; is safe and well-maintained, keeping tenants happy and reducing the likelihood of accidents or health hazards; and maintains the property’s condition and value over time.

Routine inspections are not an opportunity to simply see if the tenant is keeping up with the housework; the person inspecting the property should appreciate that people are living there. However, the tenant should have the property in good condition on the day of inspection and landlords and agents may like to: 

• check for any water leaks, evidence of pests, damage or deterioration to the property 

• ensure any property fixtures are working 

• look at any future maintenance items that may need to be addressed. 

There are laws around how a routine inspection must be actioned and how often they can be carried out. Check your local tenancy legislation for details.  

If they are not conducted in line with tenancy requirements, or if they are not conducted at all, they can impact things when it comes time to making an insurance claim.  

Routine inspections and EBM RentCover  

For those who are covered by EBM RentCover, if routine inspections aren’t carried out, then claims for pet damage might be compromised or event declined (this is part of the pet damage clause under Section 1 of our RentCover Ultra and Platinum policies). 

If an EBM RentCover policy is taken out part way through a tenancy and there isn’t a condition report completed close to inception, then the insurer can deny claims in this instance as not enough evidence has been provided to establish the loss occurred within the period of insurance. 

Meanwhile, if EBM RentCover receives a claim for gradual damage where the location of the damage is obvious, and routine inspections have not been regularly carried out, the claim may be denied as had they been carried out, the issue could have been identified earlier and prevented any further loss or damage. 

Ultimately, regular routine inspections allow the landlord (or property manager) to get an idea of any maintenance or damage occurring at the property and enables them to act. If the insurer feels that the lack of routine inspections has contributed to significant damage, it can result in the claim being denied. 

Scenario one 

Say a claim needs to be made for storm damage to a ceiling. After investigation, it was discovered that the leak had started as a small discolouration. Over the course of a year the damage had worsened each time it rained. Eventually this led to the ceiling caving in following a storm. As routine inspections were not completed, the agent was not able to spot the discolouration and was not able to remedy it in a timely manner. This then led to greater damage. In this scenario, it is unlikely a claim would be approved as steps were not taken to mitigate further damage and loss.  

Scenario two 

Mid-way through a tenancy, landlord insurance is applied for and accepted. One month later, a claim is submitted for accidental tenant damage. It is said that the child at the property took a permanent marker and used the walls as a canvas. In this scenario, no condition report was ever completed and returned by the tenant, nor had there been an inspection conducted at the property during the tenancy to that point, so it is hard for an insurer to determine when the damage occurred – did it happen before or after insurance was taken out? As it is difficult to tell, the insurer may decline the claim.  

Routine inspection checklist 

Sometimes it helps for landlords or property managers to provide the tenant with a list of things to consider before a routine inspection. These include: 

• cleaning and tidying the property 

• removing any mould 

• repairing any damage (or highlighting the damage to the landlord or agent at the inspection) 

• tidying up outside areas (e.g. decks, patios). 

Problems found during the inspection 

If on inspecting the property, an issue at the property is recognised, the landlord or agent should work to rectify it. For example, if there is a water leak, this should be fixed as soon as possible to prevent further damage.  

Meanwhile, if a significant breach is found, the landlord or property manager may issue the tenant a breach notice to rectify the issue. A significant breach may involve the tenant using the property for an illegal purpose or exceeding the number of occupants allowed to live at the property.  

Got questions? 

To summarise, under a landlord insurance policy, the landlord (or the agent acting on their behalf) has an obligation to keep the property in good repair and mitigate potential or further loss or damage. Regular routine inspections allow the landlord to get an idea of what is happening at a property. If the insurer feels that the lack of routine inspections has contributed to significant damage, it can result in the claim being denied.  

If you have any questions, the EBM RentCover team can help. Please contact 1800 661 662.