Q: Does the landlord still need landlord liability insurance if their contracted property manager says they'll cover it?
My friend is renting 3 rooms from me + common area. So she's my tenant and pays flat rent while she takes the profit from her subleting the rooms out as mid-term rentals/airbnb because that's her side business. So she's acting as my tenant and property manager basically since she's doing all the background check, rent collection etc.
She told me not to worry about having Landlord liability insurance (in case of fires, tenant injuries, damages etc) because she'll cover it which covers the whole house. Is it safe for me to rest assured if our contract states that or can she in the future, refuse to cover all legal fees/damages/evictions in the future? Is it legal for me to have such an agreement or do I have to add anything?
Should I be worried about this set up? If so, then what?
Also, do I need 2 separate contracts (property manager vs lease agreement) or can I combine them or does she automatically incur all legal costs regarding subtenants?
I'd appreciate the help
A:
Under California law, as a landlord, you should maintain your own landlord liability insurance. Even if your tenant, acting as a property manager, offers to cover it, your own policy ensures you have direct control and certainty over the coverage. Relying solely on your tenant's insurance can leave gaps in coverage, particularly for incidents that are your responsibility as the property owner.
Your arrangement with your tenant involves her subletting rooms and managing the property. It's important to remember that, ultimately, as the landlord, you bear the legal responsibility for the property. This means that any liabilities, such as injuries or damages occurring on the property, could ultimately fall on you.
Regarding the contractual aspect, it's recommended to have separate agreements: one lease agreement with your tenant and another for property management services. This separation clarifies the responsibilities and expectations for each role. Combining these roles into one agreement could lead to ambiguity and potential legal complexities, especially concerning liabilities and management duties.
In essence, protect yourself with your own insurance policy and ensure clarity in your contractual arrangements. This approach helps mitigate risks associated with property rental and management under California law.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
