It’s a bit of a scary thought isn’t it – that your investment property might be deemed to be uninhabitable!  There are usually some extreme circumstances that bring you to that sort of place.  So whilst it doesn’t happen often, it definitely is something that landlords need to be prepared for.
Our office has had this happen to 2 of our properties over the past 2 years and we have learnt so much from the experience.  I thought it might be time to share with our other landlords the types of things that have happened to bring a property to this point, and also the things that our office has learnt from the experience.
The first occasion happened in Winter of 2015.  I was woken by a very early morning call from a tenant, who told me that a tree had fallen through her house.  That’s right people – I said through!  We had experienced quite a bit of rain in the time leading up to this incident and a large poplar tree from a neighbouring vacant block became loose on its roots and toppled right over.  It missed injuring the tenant by about 2 metres.  So realistically, we can count our lucky stars that the only injury here was to the property!  You can imagine the scene that we were greeted with when we arrived to look at the property – a tree in the kitchen, dining and living rooms of the house.  The force had been so great that all of the ceiling gyprock sheets had been forced off their nails and were hanging down and every downlight in the house was pushed out of its housing. There was a giant hole in the roof and ceiling and it had taken out the power on its way down as well!

The second incident happened when the tenant of the unfortunate property was out collecting wood.  This one happened in winter as well – a year later in 2016.  In this instance, a water pipe in the wall of the property froze and burst in a huge frost.  Because the tenant was not at home at the time, he arrived home to find water spilling out of his power points.  I was so shocked when he called me at first that I thought he was a little crazy!  On the phone, he said to me “Tina there is water pouring out of my power points…”  All that I could think was how could this even be possible!!  As it turns out, the water had been running for such a long time, the wall cavities filled up and water was forced out of the power points and then started coming out of the ceiling as well.  The house was also flooded – it was not good.
The tenants in both properties were excellent and were willing to work in with the insurance companies regarding the repairs to the premises.  In both of these circumstances, the repairs to the properties were carried out by insurance companies and the landlords were both completely covered for the repair issues (barring their excess payments of course).  So you would think that everything would be all good right?
In actual fact the repairs to the premises took in excess of 8 months in one case and 11 months in the other!
So whilst a tenant is happy to work in with things for a short period, and is often happy to have either a reduced rental amount or even rent free, this will only work for a short time, before they start to get over the whole process and then things can start going pear shaped very quickly!

From these experiences, we have made the decision that in circumstances like this, the property is going to be declared uninhabitable and the tenants will be given termination for this reason.  This allows the tenant to move out of the property immediately, which frees the property up for access for the insurance companies and repair works.  Access to premises can be a really tricky situation and a work site is not something that you want being ongoing around a tenant and their families, because if someone is injured it can complicate matters even further.  Along with this, insurance companies are generally very inflexible in their timing, which means that if a tenant will not allow access for any reason on the dates that a repair is being scheduled, it can extend the schedule and draw things out even further.
As a landlord the most important thing for you to remember, is that you want to make sure that you are covered for these unforeseen events.  This means that you need to make sure that you have building insurance, contents insurance (for your own items like light fittings, carpets, blinds etc…not the tenants goods) and landlord protection insurance, to ensure that you are covered for the payment of rent during an uninhabitable period.
We always think that these things won’t happen to us, and I am sure that the poor people who had these incidents happen to them wish that it happened to someone else as well!  Like the good old boy scouts motto we need to ‘Be Prepared!’
If you are not sure that your insurances are up to date, or you would like to look at some options, please make sure to contact our office and we can point you in the right direction to look at some of these things.