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Tenant Arson and Vandalism Happens!
by Kelly Troy on July 29th, 2010
Though most of us would like to believe that all of our tenants are good people and that they would never intentionally do us, or the property they rent from us, any harm – that is simply not the case.
Renting to tenants is ALWAYS an unknown risk to some degree and like it or not, bad things happen. I am writing this short blog in response to a serendipitous event that occurred yesterday, July 28th. As coincidence may have it, I had just had a conversation with a client regarding questions about tenant-vandalism and property damage. She refused to believe that any one of her tenants might actually cause intentional harm to the home that she rented to them. She did not believe that she needed coverage for vandalism and she chose to purchase lesser-coverage for her properties. Two hours later, as I was driving, I heard a radio news update relating to an arson case in the Austin area whereby the ELDERLY TENANT, who was two months in arrears with his rent and in the process of eviction, intentionally set fire to the rental home he was being evicted from. Though not a case of true vandalism per se (just a minor case of arson!), the story graphically illustrates the fact that, as landlords and property owners, you can never actually judge human behavior or truly screen your tenants and it is up to you to limit your risk and make certain that you are properly insured against any reasonable loss that may occur, whether due to weather, accident, or intentional tenant damage. Remember, insurance is for the things that ruin your life – not your afternoon.
By Shelton Green / KVUE News
Austin fire investigators said on Thursday that it could be a couple more days before their investigation into a house fire from Wednesday will be complete.
On Wednesday investigators said they believed the fire at 6103 Shoal Creek Boulevard was arson.
Michael Joseph Point, 60, had been renting the house for four years, according to Travis County Court records, and was close to $3,000 behind on his rent.
The owner of the house sent Point an eviction notice on July 13. On Thursday, the day after the house fire, Point was supposed to have an eviction hearing in a Travis County courtroom.
“I really can’t make heads or tails of it,” said one neighbor who didn’t want to be identified. The same neighbor says Point left a note on her door at some point before the house fire started. “The note was just … it was an apology for parking in front of the house and it said, basically, that we would know the reason for it by this afternoon.”
As of Thursday evening, Point was still in Brackenridge Hospital. His condition was unknown.
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By Katie Friel / News
An Austin-based journalist who contributed to such local publications as the Austin American-Statesman and the Austin Chronicle has been accused of setting fire to his rented Shoal Creek home.
Michael Point, 60, is believed to have poured gasoline throughout the house, which, according to the police affidavit, may have been ignited by the pilot light on the water heater. Point was reportedly found a few blocks from the scene by the Austin Police Department. He was taken to University Medical Center Brackenridge for treatment.
According to the Austin American-Statesman, court documents revealed that Point, who had been a tenant in the home since 2006, had fallen two months behind on his $1,295/month rent. He’d received a notice of eviction on July 2.
Point, a freelance writer, specialized in coverage of music and baseball, the Statesman noted. In addition to local publications, his articles have also been featured nationally.
An Austin Fire Department spokesperson told the Statesman that Point is currently still undergoing treatment at UMC Brackenridge. Upon his release, he will be arrested and charged with arson.
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Kenny, unfortunately, you have just experienced one of the downsides to owning student-leased housing. Many insurance carriers will not even insure properties like this that are rented to students (for this very reason) and of those that do (normally surplus lines), the premiums are quite expensive.
You have already done the right thing by getting the police involved, but they may not do much for you since there is no ‘smoking gun’ as to exactly (by name) who the vandal(s) is/are. I’m not sure you will get any resolution on this route. Also, not that it does any good for you right now, but from what I understand from your comment the situation was allowed to grow out-of-hand by not strictly enforcing your lease (allowing the coming and going of the leasees) and by not performing regular property inspections to catch this type of damage and abuse at the beginning. With student housing, you almost have no choice but to inspect the property on a monthly (if not bi-weekly) basis. I have seen one building leased by a fraternity that actually ran two garden hoses full blast for two days into the downstairs and literally FLOODED the entire 4,500 s/f bottom floor in order to have a ‘swamp-themed’ party. Not only was this an obvious life / safety / fire hazard with regards to the electrical outlets, extension cords, etc., but it did over $120,000 worth of damage and the building owner sued the main fraternity organization.
In your situation, there might (and I stress MIGHT) be a couple of options.
1. If any of the tenants had a renter’s policy to protect their belongings (which I strongly doubt), it should have some liability coverage built in, which means that it may provide the coverage necessary to make the repairs to the building caused by the tenant himself. This is a long shot, but something worth asking about. If they are being sued, anyone who had a renter’s should be able to file a claim on it.
2. Another longshot (and this is where you need legal advice), you may be able to file civil suit against the PARENTS of the leasees since they are (and I am assuming this) full-time students living away from home. The parent’s homeowner’s policy might provide some liability coverage for the acts of their children (since they are full time students). I wouldn’t get my hopes up, but I would speak with my attorney about it;
3. If these building was leased to a fraternity, you may be able to file suit against the organization itself;
4. Finally, you are probably able to file a claim on your own insurance policy to cover the damages. This is assuming that there is no exclusion for ‘tenant caused damages’ in the policy itself (which is why it is so important to understand the policy you have before something like this actually occurs. I know that statement is a little ‘after the fact’ though). If there is no exclusion, this is obviously beyond ‘normal wear and tear’ and the policy should cover you under the peril ‘vandalism and malicious mischief’. My guess is that you have a commerial property form (aka: policy) and, if it was issued correctly, it should provide coverage on a ‘Special’ (also known as ‘open perils’) basis. This is probably your best bet. In addition, it may supply you with loss of rental income while the property is being repaired as well.
This is obviously a bad situation with an extremly high repair cost associated with it and I’m sorry that you are suffering through this. I wish you the best of luck in finding a good resolution and recovering your costs.
I rented a house to 4 college students (not that college students should matter) The original students moved out one by one with giving me proper notice, but someone always came and paid the rent. Last May, I noticed someone had sprayed painted the side of the house. I had not received May’s rent. I put a note on the door and stated I was coming over with the police department the next day. The next day with the police, I entered the house and found it had been total destroyed almost $95,000 in damage. I hired an PA and filed a claim. After 6 months they only want to pay 3,000 for the siding. The city performed their yearly CO 6 months prior to the vandalism.
Any suggestion?
I thank you in advance for your time and consideration in this matter.
Very truly yours,
Kenny Marshall
kennymarshall123@gmail.com