tenant slips on ice - now what?

Question

Happy New Year.  Well, a fear of mine happened today.

Tenant called and said they slipped on ice outside my four-plex and needed to go to emergency room.  Cracked knee cap and ligament damage.

Says to me- "I'm not planning to come after you because you're a nice guy.  Just drop off a shovel so I can clear things now and again."

Now, I clear snow personally if it snows over 1.5 inches.   And I left a 50 lb bag of melting salt in the utility room of the place.

I own this place in my name (no LLC or S-Corp).  Insurance: have business liability coverage ($500,000) and personal umbrella liability policy of $1 million as well.  
 
Thoughts?  Suggestions?  Prayers?

Michael Rossi · Answer

If your insurance company has to pay out on very many claims, your insurance will go up (if you're lucky) or be cancelled if you're not.  I know a guy that was essentially driven from the rental business because he had a few claims and then couldn't get insurance at an affordable rate.

Mike

Michael Rossi · Answer

My company policy is to FIGHT ALL LAWSUITS! 
            
            All of my properties are in entities.  We make the scumbag contingency lawyer and their idiot client fight for EVERYTHING:  every piece of information; the identy of the owner (in the case of my apartment buildings); the name of our insurance and even the presence of insurance -  EVERYTHING!  Unless there is a big claim, most scumbag contingency lawyers are not going to pursue a claim if it's easier to simply go after easier prey. 
            
            Mike

Ingrid Nagy · Answer

Nate, don't misunderstand.  Legal expenses for defense claims in these situations are covered by your insurance policy that would already be an expense in your cash flow analysis.  The only legal expenses you might incur would be for evictions if you hire an attorney to represent you.

Account Closed · Answer

Yep, those knuckle-dragging contingency lawyers are just too stupid to check public records and request a court order the disclosure of ownership.

Nate Nook · Answer

I am a pretty new investor, this is a very good example of an expense I would not have added to my cash flow analysis. (Legal expenses due to tenant claims)

Matthew Gil · Answer

This is what caught my attention.  We don't allow our tenants to shovel, nor are we DIY shovelers on our multi's.  We contract that work out to professionals.  There are just to many liability concerns.

We require our tenants to shovel our SFRs and that is clearly spelled out on the lease.  But, at the end of the day we are still responsible if a mishap happens.

Lastly, we are like Mike.  We have a no give-in policy.  As soon as some hints that they are going to seek remedy, we immediately refer them to our attorney and get out of the line of communication.

Timothy W. · Answer

Slipped "outside"?  Where outside?  Common areas or in an area specifically for their unit or on public property?

Account Closed · Answer

First, go clear the ice, today. You might want to take pictures before and after. You want to be able to demonstrate you address safety issues as soon as they come to your attention.

Second, show the tenants where the melting salt is kept and demonstrate how to use it properly. Tell them to let you know when the bag is half empty so you can bring another one over and place it in the storage area.

Third, get with your attorney as soon as you can to make him/her aware of the situation.

Fourth, review your lease to make sure the party responsible for clearing the walkways of ice and snow is clearly spelled out.

Fifth, remember, THIS is why you bought insurance.

The good news? Be thankful it was not a guest of your tenant. When you meet with the attorney they can explain why.

Ingrid Nagy · Answer

He is right.....this is what we have insurance for.  All we can do is minimize hazards.  A small piece of drop ceiling fell on my tenant's head from an upstairs leak while she was in the shower.  It hit the shower head first then hit her.  She just collected $10K.  Another tenant slipped outside on a "leaf".  I produced affidavits from other tenants showing that we had just bagged 10 bags of leaf 4 hours before her fall.  In my deposition I asked the attorney did you expect me to stand under the tree and catch each leaf as it falls?  She collected $25K.  A third tenant's small baby fell down the marble steps and broker her leg.  This tenant was considerate knowing it was not my fault and took care of her medical bills on her own.  Each tenant is different.  If they are "sue happy" folks they know the system and they collect even without witnesses and without E.R. visits.