• Page :
  • 1
  • Text Only
Voting History
rated:
I would appreciate advice on a situation we have encountered with our tenant; details below:

We are landlords of a condo unit. On the day of the current tenant's move-in, they struck the parking garage structure with a rented truck, damaging the garage door and structure to the tune of $11,000. The tenant notified us the day it happened, and indicated in an e-mail that they take full responsibility for the situation. They filed a claim with their auto insurance, which was apparently initially approved, but then was ultimately denied due to limits on the gross tonnage of the vehicle driven at the time exceeding their personal auto insurance limits. The repair work was performed as it was necessary for operation of the garage. The condo association paid the contractor as they did not want a lien on the property.

We have been sent a notice from the condo association saying that we (landlords) are responsible for the funds owed because under the rules of the condo association we are responsible for the behavior/actions of our tenants. We immediately notified the tenant of this situation (they were not aware that the claim was denied), and they are trying to fight the claim with the auto insurance. However, I am not very hopeful this will lead anywhere and I get the feeling that they are dragging their feet.

We have a standard landlord insurance policy but have not filed a claim as I view this as a last resort before suing the tenant to collect the funds, should they not pay. There seems to be some question as to whether it would cover such damages, anyway (I spoke with the company). The condo association filing a claim is 99% not going to happen as it takes a board motion and may raise rates.

The terms of our lease with the tenant has a broad indemnification clause that protects us from such a situation (I've copied it below) - but what I'm looking for advice on is the steps by which to start the process to get the money from the tenant.

Ideas for first steps? I've considered the following:
-Sending a certified letter or notice of the amount owed myself and citing the terms of the lease.
-Engaging a lawyer to send a collection notice to the tenant with a requirement of payment in X number of days.
-Filing a claim concurrently with my landlord insurance while trying to collect via the - any thoughts on this?

Any help would be appreciated.



Indemnification clause:
Landlord shall not be liable and tenant hereby waives all claims against landlord for any damage to any property or any injury to any person in or about the Premises or the building of which the Premises are a part of, or in the structure or equipment of the structure of which the Premises are a part from any cause whatsoever, except to the extent caused by or arising from the gross negligence or willful misconduct of landlord. Tenant shall protect, indemnify and hold the LANDLORD harmless from and against any and all loss, claims, liability or costs (including court costs and attorney's fees) incurred by reason of (a) any damage to any property or any injury to any person occurring in, on or about the Premises to the extent that such injury or damage shall be caused by or arise from any actual or alleged act, neglect, fault, or omission by or of tenant, its agents, servants, employees, invitees, or visitors to meet any standards imposed by any duty with respect to the injury or damage; (b) the conduct or management of any work or thing whatsoever done by the tenant in or about the Premises or from general use Premises by the tenant; (c) tenant's failure to comply with any and all governmental laws, ordinances, rules, and regulations applicable to the condition or use of the Premises or its occupancy; or (d) any breach or default on the part of tenant in the performance of any covenant or agreement on the part of the tenant to be performed pursuant to this Lease. The provisions of this Article shall survive the termination of this Lease with respect to any claims or liability accruing prior to such termination.

Member Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

How odd.
Are you really sure that "under the rules of the condo association we are responsible for the behavior/actions of our tenants." as just because the board member said so, does not make it so.
Suppose your tenant had beat to death a kid in the parking lot, would you be facing criminal charges ? I don't think so.
I think you should first check your condo rules to see what it says as this quoted rule may only really apply regarding noise and disturbances, and then possibly ask a lawyer if this is a valid type of rule and your options.
Clearly its your tenant that is at fault, and if that person had been a friend coming to visit you in his truck that caused the damage, the condo would only be after your friend, the idea that you as landlord are responsible for accidental issues that are unconnected to your physical unit (not bath-tub overflow), seems to me wrong and unfair, and scary to all landlords!

Youre screwd. Auto policy does not cover moving trucks nor will the credit card. Unless they paid the policy from the rental agency there is no recourse other than your own insurance. Snowball chance in hell you will ever collect from the tennant even with a court judgement. Amount too high for most small claims court so you will need to lawyer up or look at 10k max in small claims.

BlueSeaLake said:   How odd.
Are you really sure that "under the rules of the condo association we are responsible for the behavior/actions of our tenants." as just because the board member said so, does not make it so.
Suppose your tenant had beat to death a kid in the parking lot, would you be facing criminal charges ? I don't think so.
I think you should first check your condo rules to see what it says as this quoted rule may only really apply regarding noise and disturbances, and then possibly ask a lawyer if this is a valid type of rule and your options.
Clearly its your tenant that is at fault, and if that person had been a friend coming to visit you in his truck that caused the damage, the condo would only be after your friend, the idea that you as landlord are responsible for accidental issues that are unconnected to your physical unit (not bath-tub overflow), seems to me wrong and unfair, and scary to all landlords!


Apples to oranges. Property damage in a common area by a tennant will fall on the unit owner in pretty much any condo/townhouse owner position. If theyblet the tub overflow and damage the unit below it would be the same situation and reasonably so.

Any ideas on what I should do now? File a landlord insurance claim? Have a lawyer send her a collection notice? The tenant is having records pulled from their rental truck company right now but I informed them that end game is that they are probably going to have to pay since there is no question of who is at fault and if they didn't pay us we would be planning on taking them to court.

Unfortunately small claims courts here are limited to 5k.

I doubt you'll be collecting from the tenant. You have their rental application, what's their income situation like?

Hopefully your LL insurance pays out and then goes after the tenant themselves (if it is allowed).

Alternately, you could sue and get a judgement and garnish their wages (you know their employer), but getting a 11k judgement will require spending probably 10k+ on attorneys. Doesn't seem worth it. Might be worth just doing small claims instead and getting a 5k judgement, but I don't know if you would waive your right to ever go over more than the 5k.

If you are going to file with your own insurance, you will need to do so in a timely fashion. You will risk being denied by your own insurance if you drag your feet on filing. End result -- the bill will land in your own lap, or as a lean against your condo for the 11k plus attorney fees by the association.

Tenant should pay, but I bet they won't.

I'm not a lawyer though - you may want to consult with one.

Make a deal with the tenant to pay it over 24 months or something. Stay on good terms with them, if the tenants skip out you are screwed. Bottom line is this qualifies under the heading "stuff happens" and is obvious landlord's responsibility.

The only way you could have prevented this might have been to insist on seeing proof of tenant's insurance, with yourself as second insured. I'm not sure, but possibly that would have covered you.

Kanosh said:   Make a deal with the tenant to pay it over 24 months or something. Stay on good terms with them, if the tenants skip out you are screwed. Bottom line is this qualifies under the heading "stuff happens" and is obvious landlord's responsibility.

The only way you could have prevented this might have been to insist on seeing proof of tenant's insurance, with yourself as second insured. I'm not sure, but possibly that would have covered you.


If they pay it out over time; but pay only half - small claims court can handle the other 1/2.

1. IANAL but the indemnification clause looks pretty leaky to me.
2. $11K for damage to a parking garage? You got screwed.
3. Ask yourself about the tenant. He's honest enough to report the damage, but careless enough to incur it. If you want to keep him, see if you can get a break on the damage claim because if you try to squeeze the whole $11K from him, he'll leave.
4. Any chance you can get your landlord insurance to go after the tenant's auto insurance, or the overpriced contractor?

Your post asks for the proper way to get money from the tenant, but there's a huge difference between getting the judgment and getting the actual money.

StevenColorado said:   4. Any chance you can get your landlord insurance to go after the tenant's auto insurance, or the overpriced contractor?

Tenant's auto insurance has already denied the claim.

Before things become to convoluted, how about getting a promissory note from tenant?

read this thread which is a similar issue from the tenants perspective
http://www.fatwallet.com/forums/finance/1249135/

I assume the OP knows the tenants debt/income. Perhaps coming up with $11k is possible..
Short term, the OP is gonna' owe the association...

OP, what's your take on the tenants ability to cough up 11k? Could be voluntary, could be not-so-voluntary... Sadly, if the tenant has no money, he probably gets a break here.

Seems like the tenant may have ability to pay through family, but is a student at the moment.

I guess its best to try to get a promissory note without a lawyer? seems like the best avenue at this time.

They are still trying to work with their insurance company to get them to reconsider the claim but based on what I've seen its probably a valid denial.

I am not your lawyer. There are promissory note templates online, although you would be advised to ensure that your state imposes no special requirements for a promissory note to be valid or enforced. If the tenant is willing to execute a promissory note, it needs to be for a specific amount (plus interest, if applicable). So you better know exactly how much you're going to need to pay to the association so the note can reflect that amount -- because once you get a note, you're going to have a hard time getting any more money out of that tenant. That said, getting a note might be a good option because -- assuming it is properly executed and enforceable -- proving an amount owed under a note would likely be easier than proving (a) that the tenant caused damage to the common area (b) in an amount of X and (c) and that the the tenant owes you money because of Y and Z. Again, I am not your lawyer.

"The condo association filing a claim is 99% not going to happen as it takes a board motion and may raise rates." Huh? Won't the condo association simply file a lien against your unit? Won't the board need to raise rates to cover the damage incurred?

If what OP says is true, that is, 1) tenant willing to pay OP for damages and 2) condo association having no intention of suing OP. Then, why w/n OP collect from tenant and OP NOT pay the condo association. Alas, the condo association will not sue because it does not need to sue. It will place a lien of $11,000 on OP's property. As others said, OP is screwed and, right now, OP has no clue how bad OP's screwed.

I would file a claim on your policy ASAP. As said if they think you were dragging things out they may try and fight it more.

Also if the policy will not pay then yes you have to go after the tenant. The next problem is they, if I were them, will contest the price paid. If they can get at least 1 other good contactor to say its even a little less then you could still get stuck with the left over part and then you would have to sue the HOA since I am guessing they choose who to do the repair.

i.e. if you think its bad now it can get much worse. So file a claim on any insurance policy you can and hope one of them pays out.

OP: One thing that hasn't been mentioned and also worth investigation... Go after the rental company's insurance. Surely they have vehicle liability insurance which is meant to cover things such as this. Tenant insurance (assuming tenant had insurance in place at the time) would cover it, TENANT vehicle insurance would not.
My suggestion:
1) File against rental co and insurance
2) File with your Landlord Insurance just in case
3) Get a third party contractor to give an estimate on the work that's already been performed (you may have pics, etc?)

Thanks for all the input. Requested promissory note from tenant and notified parents of the issue. Tenant (parents) ended up paying in full to avoid a judgement and wage garnishment!



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014