Fire in 4-plex; what's landlords obligation?

[Shane S.]

I'm in the process of purchasing a 4-plex that had a fire in one of the units; the structure is fine but it got me thinking. If a fire happens in a multi unit property and forces all the tenants to move, what is the landlord required to do? Does the owner have to pay to relocate all the tenants? Does insurance have to? Or is it up to the tenants?

I tried to find information on this but didn't have any luck. If you have any input or know of any articles it would be much appreciated. 

[David S.]

First and foremost, it would highly depend on local and state laws as far as your obligations to the tenant.

In my state with that situation, my only obligation is to return the deposit to the tenants. As a matter of "housekeeping" for the paperwork, I would have the tenant sign a mutual agreement to terminate the lease when I hand over the deposit.  There may be a case where the tenant doesn't want to move (permanently) and will wait for repairs.  In that case, I would sign an agreement with them to only be responsible for the rent of the days they actually occupy the apartment.

No landlord insurance policy that I know of pays for relocation of the tenants.  That is usually a feature on owner/occupant policies.  There may be rider that you could purchase for that? As far as your insurance, I would make sure you have "loss of rents," in which the insurance company pays you your missed rent while repairs are ongoing.  Also, it should have a liability portion as well.