Tenants want a swingset

13 Replies

Greetings all,

I recently closed a deal on my first multi-family apartment complex (18 townhouse, 1 single family). I have a resident manager in place from the former owner that I'm inclined to leave in place as he seems to be doing a great job. When I met with him for the first time as owner, he brought up a request to me that he had spoken to the previous owner about and was denied. His request was that we put in a playset of some kind for the children in the community. There are a number of children in the community (some of whom are related to the manager) and he wants to give them a convenient, safe place to play.

The former owner had denied it on the basis of insurance, but when we (the former owner and I) were discussing it yesterday, he mentioned that the insurance agent had been cautious about it, but not killed the idea completely. He hadn't felt comfortable with it, so he said no. Because of the way the deal is structured we are still under the insurance policy that he had in place (his is much less than we can currently insure the structure for).

The manager has offered to put the set in his backyard (he lives in the single family home) so it can be monitored easily.

What advice would you give me in this situation? I'm wondering if we'd be safe enough if he monitored it closely and we restricted it to residents and their guests only? I still need to check with the lawyer, but I'm wondering about posting signs that say something about resident and guest use only, etc... Maybe putting up a simple one that would be better than nothing, but not nice enough to attract the neighborhood kids??

Thanks!

Kurt

Are there other things you can put in like a sand box play area or something a little smaller?  I understand the insurance concern.  I would look into it more.  It would be a nice gesture though it can get expensive as I am guessing it would have to be the type they install at the parks, more heavy duty. 

Medium buymemphisnow stacksCurt Davis, Buy Memphis Now | [email protected] | 605‑310‑7929 | http://www.BuyMemphisNow.com

Yes, definitely discuss the specifics with your insurance carrier and lawyer and I would think posted signs of "use at your own risk" are a must.  If the answer is no,  remember that you are the one on the hook, not your manager.  Congrats on the purchase - sounds very exciting!  

Medium labelJonna Weber, Jonna Weber Real Estate | [email protected] | 208‑608‑4884 | http://www.jonnaweber.com | Podcast Guest on Show #80

Originally posted by @Jonna Weber :

Yes, definitely discuss the specifics with your insurance carrier and lawyer and I would think posted signs of "use at your own risk" are a must.  If the answer is no,  remember that you are the one on the hook, not your manager.  Congrats on the purchase - sounds very exciting!  

 Thanks! It is exciting, but yes I am keeping in mind that I'm on the hook...that's not as exciting :)

Originally posted by @Curt Davis :

Are there other things you can put in like a sand box play area or something a little smaller?  

 That's a good thought, I'll consider that a little more. I was indeed thinking about a heavy duty one, but they are expensive...maybe not the best since we're trying to keep the financials looking attractive. On the other hand, a cheap one won't last, I'm sure of that.

@Kurt Winsley   any one gets hurt your in for a world of hurt I don't see how the benefits would out weight the risks.

and tenants abuse these things.. friend of mine put all new basket ball hoops and BBQ units with table etc in his C class ( maybe lower ) Memphis apartment complex.. .the items did not last 60 days and they were either stolen or completely ruined.

Medium ksqoekox 400x400Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222

@Kurt Winsley   and just antidotal  I just bought a G L policy for a 27 home subdivision I am building.. it needs to be good for 10 years.. build out is about 10  million.

I got the policy and sent it to my attorney to review and advise.. ( recommend this on any larger policy)  his response was I find it hard to find anything they will cover   LOL.

So back to the agent and a lot of negotiating with the underwriter..  At the end of the day we bought a 2 mil policy.. But we made our general up his to 5 mil.. and each sub has to have one million... so that's about 8 million in coverage before it would get to us personally. And the thought is our 2 million would go to attorneys for defense.

some child gets maimed and I could see this being a pretty big deal with no substantial benefit to your cash flow and or ability to rent the units.. let them go to the public playground.

Medium ksqoekox 400x400Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222

Insurance coverage questions are yes/no questions.  If your insurance is OK with it, do it.  If not, don't.  But 'ehh, we don't love it" isn't an answer you should accept from an insurance agent.  They don't love anything.  Make them answer, yes or no.

@Kurt Winsley and even though we have this all in a separate LLC... the plantif WILL go after us personally.. so we will spend hundreds of thousands just tyring to isolate the LLC.

Of course this is only in the case of a doomsday situation.. but what if a roofer fell off the roof and died... or if we have a class action suit because the siding was made in china  etc etc. 

Medium ksqoekox 400x400Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222

It is not just the equipment but prepping the ground with the proper amount of mulch or other surface. And to think they let us play on those spinning metal merry go rounds..

If you decide to do it  for placement consider where it would be good for all regardless of who is in the house.    You might be better off with a more central location with no guarantee that you will supply supervision. 

Tenants living in the complex moved there when there was no playground so that obviously is not a deal breaker whatsoever.  I do not see the benefit to you as a landlord putting in the swingset, other than it showing you are a nice guy.  

If a tenant or a tenants visitor gets hurt using that playset they are not going to care that you are a nice guy if suing you becomes an option to offset medical bills.

Talk to an attorney and your insurance agent.

Medium rzt hc 6483Michael Noto, SalCal Real Estate Connections | [email protected] | 860‑384‑7570 | https://www.zillow.com/profile/Mike-Noto/

@Kurt Winsley   - I recall @Joe Fairless on his podcast talking about some improvements and systems he has in place for his multi-families that have helped retention and morale.  He and some of his guests have referenced some unique ideas.  I imagine there are several other options that the tenants would like for much less financial outlay and risk.

Medium labelJonna Weber, Jonna Weber Real Estate | [email protected] | 208‑608‑4884 | http://www.jonnaweber.com | Podcast Guest on Show #80

Thank you all for the responses! I will certainly think long and hard about this (and check with the attorney and insurance agent) before i make a final decision.

@Jonna Weber , I've been listening to some of Joe Fairless' podcasts as I have time, so I'll search for it on his podcasts. Thanks for the suggestion!

FYI, I am president of my HOA. We looked into grading some common area, prepping it, and installing a smallish piece of playground equipment. The cost was over six figures. Non-personal equipment that is designed to minimize liability is extremely expensive. I have a hard time seeing how the cost could be worth it. (Also, the recommended minimum clearance for equipment is much larger than you would expect, so it will take up a large amount of space.)