One of the ever increasing costs of being a landlord, particularly in Victoria is land tax and property rates. The values of properties are being reviewed by state governements and/or local councils and it is going up year on year.
Another trick that some States Governments have introduced, and I again use Victoria as an example is that the property owner only has 60 days in which to lodge an appeal. This is catching a lot of people out who find out the value being put on their property is way too high.
So what is the implication for insurance and rental insurance in all its various forms. Well, often local authority/Council rates are paid for by the tenent in commercial situations. Many landlords also get the tenant to pay the land tax.
Another expense which is we all know is not getting cheaper is insurance and insurance is yet another outgoing more often than not paid for by tenants in some form in additon to the rent.
So if the property was to become untentable and the tenant invokes the rent abatement clause or cancels the lease, then the landlord will not only be missing out on the rental income but will now be paying these property outgoings.
For this reason, it is important for brokers not only to check if there is any rental increase to take into consideration but also increases in all the outgoings so that the Insured is fully protected.
Finally, following on from my posts over the past two days it is important to review the Indemnity Period that is in place for loss of rent, gross rentals, rent payable or rent receivable.
If you ever need assistance in getting this right you can always call on one of the experts at LMI Forensicsfor help.
