Renter's insurance worth the extra cost

Question: Can a landlord require renter's liability insurance?

Tenants' attorney Kellman replies:

The name of the game for landlords is to shift as much of the costs of maintaining their investment on to the renter without raising the stated rent. As we know, adding costs to the tenant is like raising the effective "rent" you pay each month to live there anyway. We get it. We see such cost shifting when landlords try to deduct routine maintenance costs from a security deposit, which we all know is improper. They also pass the costs of water on to the tenant without individual water meters, which the legislature has not decided if it is improper or not yet.

Now many landlords are trying to pass the liability protection costs (renter's insurance) to tenants for damages that have not even happened yet. While common in commercial tenancies, requiring this for residential tenants is still relatively rare but does not appear to directly violate any law.

Renter's insurance is a protection against losses suffered by the tenant caused by the tenant's negligence or by factors beyond the control of the tenant but for which the tenant could be blamed. Landlords like this because without the insurance, they cannot rely on the tenant to cover significant damages, which they (or their own insurance) will be forced to pay. Tenants should like renter's insurance since it not only covers damage to property but also pays them for losses occurring due to theft or other incidents (i.e. fire, water leaks, etc.) The downside, of course, is the cost of the policy, which just increases the monthly costs to live there. The good news is that this cost is pretty low and is for a service and protection that can be of great value -- and it directly benefits the tenant rather than just paying more rent to the landlord.

Question: My son has been leasing a house for more than three years. He's on his second contract, which will be up next June. My son has recently asked to break his lease, the reason being that his wife shot herself to death in that house and he cannot bear to live there. He tries to stay with relatives when he can. The landlord says that is not a good enough reason to let him break the lease. The landlord wants my son and me (I co-signed for him) to sign another lease agreement that says we are responsible. We are even willing to find tenants for this landlord. Are we asking too much?

Tenants' attorney Kellman replies:

It is amazing how some landlords just forget to be human beings. The tragedy of the suicide should be plenty enough for sympathy, compassion and the speedy resolution of this lease issue. Sadly, with this landlord, it is not. Under law, the death of a tenant may certainly cancel that tenant's lease unless the lease provides otherwise (i.e. language making the lease binding to heirs and successors, etc.). In this lease there were co-tenants who all signed it besides the deceased individual. In signing the lease, the co-tenants all relied on each other as security to pay the rent. Also, the lease was between the two parties, the co-signer and the landlord, and that each party agreed on that to be the case. Now one party has been removed from the lease by an unforeseen act, which changes the original arrangement of parties. You can take the position that this situation affords a manner to cancel the lease. Even if the death could be ruled not to be a cause to terminate the balance of the lease, in most cases if you are replaced by tenants who pay the rent for the balance of the lease term, there can be very little to claim against you. As always, seek the advice of an attorney before breaking any lease.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and co-author of "Real Estate Investing for Dummies," and San Diego attorneys Steven R. Kellman, director of the Tenant's Legal Center, and Ted Smith, principal in a firm representing landlords.

E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com.

Questions should be brief and cannot be answered individually.

Copyright 2006 Inman News