will insurance possibly cover this nightmare? or help a little?

Question

I purchased the property in august 2019, home inspection was good and pretty much everything wrong with the building(multifamily) was taken care of and fixed by licensed contractors before closing as part of the deal.

I just evicted a tenant for non payment of rent, who decided to move out right before he was served by the sheriff, he changed the locks to make sure I couldnt get in, stopped paying rent, then I started hearing sawing, hammering and power tools and oh boy.. he removed walls, railings and insulation from the barn attic storage area he had that's attached to the apartment, he apparently replaced the bathtub surround and put a new one on but didn't seal it to the tub... and continued to take showers, I just had new tenants move into the apartment below this trouble apartment and there is now wet ceiling in there kitchen right under this said bathtub...this was not damaged or wet when I showed them the apartment which was the week he was moving, I heard him just running water for a couple hours one day, Im sure he did this intentionally to cause damage. It's a 119 year old building It's easy to hear things.

he also painted over wall paper and now its falling off in huge strips, he put holes in the drywall, he dumped grape juice or wine on the carpets and they are ruined. He left several thousand pounds worth of junk that ive been removing.

none of these things were an issue when I purchased the property, none of these things were an issue when I had the home inspection done, none of these things were an issue when I did my first or last walk through before the sale

He was late with rent ever since I inherited him but always ended up paying so I could not evict him, Ive been trying to find a way to get him out, then I noticed he was having people over even when he wasnt home, using his apartment for showers and laundry, multiple people, all the time, different vehicles. I confronted him and gave him notices he then stopped paying rent and I started the eviction process, he decided to leave right before I had the sheriff serve him, but it was about a 3 week process from the first notice to him texting me saying "the keys in the door" and "TY have a GREAT day :)"

My attorney said it probably wouldn't be worth bringing him to court.  Maybe insurance will help? maybe I should get a new lawyer? what say you bp? I'm hemorrhaging time and money

Jose Linares · Answer

@Jeremy G.  Definitely file an insurance claim.  This type of loss would be covered under your landlord policy.  A majority of these types of damages fall under vandalism, unauthorized repairs, & faulty workmanship.  Are you living in one of the units that you were able to hear all of this?

To assist with coverage for these damages, be sure to provide your adjuster with a timeline of events.

• Date property was purchased: August 2019
• Invoices for all work completed prior to closing.
• Date tenant stopped paying rent.
• Date you provided tenant with eviction notice.
• Dates that you heard renovations start.

All this will give the adjuster a timeline to illustrate "malicious intent" by the tenant.  The items that may be considered "wear & tear" are the holes in the drywall & carpet stains from wine.  However, based on the extent of all the other unauthorized repairs & damages, that is minimal.

I would advise against hiring a public adjuster or lawyer at this point.  The fees associated with their services often take away from your settlement and the true cost for the repairs.  Instead ask friends, family, & local investors for any restoration contractors they would recommend in the area.  They will not charge you a fee and can give you a real world estimate on the cost to bring the home to "pre-loss condition" and your standards.  They may also already know your adjuster and can expedite the claims process.

Give your insurance carrier and adjuster an opportunity to meet with you, explain the claims process, and address your concerns.  Should you feel they are not providing you with the services & coverage warranted, you can always consider an attorney or public adjuster at a later date.

I hope this is helpful.  Feel free to send me a PM with any additional questions.

Jose Linares · Answer

@Tim Wieneke I am sorry if you interpreted my profile incorrectly.  My profile does not state that I am currently a property adjuster.  It states "On my path from property claims adjuster to financial independence through real estate...."

It is fairly clear that I work for a commercial property restoration company, as the company profile is linked & listed on my BP profile.  I am simply providing my recommendations from both sides of the insurance claims process to assist BP investors.

Timothy W. · Answer

Well Jose, you have a bigger problem then.  You say "I am simply providing my recommendations from both sides of the insurance claims process" but you are not licensed as a public adjuster so you cannot represent the other "side" of the insurance claims process.  You can recommend property repairs and THAT'S IT.  You aren't licensed to recommend coverage, business interruption, loss of rents, code upgrade coverage, endorsements, none of that.

I know we had the same carrier indoctrination about what to say about public adjusters.  I've been there.  I was trained at Farmers in Simi Valley and handled over 3,000 claims across over 30 states for insurance carriers and got a slew of credentials before I switched to this side.  I know every tactic they employ and it is disingenuous for you to represent to people here that as a contractor you can handle the other side of a claim when you and I both KNOW that a contractor is not licensed to negotiate coverage and non-building damages unless the contractor is also a licensed adjuster.

I was clear in my posts when I said a public adjuster cannot handle bad faith elements like an attorney because they are not licensed to.  You can at least show the same professionalism and disclose to people that as a contractor you are not licensed to negotiate coverage like a public adjuster can.

Timothy W. · Answer

Cassi,

It turns out I wrote on this same topic 11 years ago when I was an insurance carrier adjuster, not a public adjuster.  Same message, lol.

https://www.biggerpockets.com/forums/95/topics/10776-understanding-the-coverage-of-tenant-damage

Cassi Justiz · Answer

@Tim Wieneke

That's good to know!

Timothy W. · Answer

Jeremy,

What state is the property in?  You're going to have some coverage issues with some of the damage if you're pursuing a claim of vandalism.  You may have better luck with the water claiming it as a straight water loss.   It's a tricky one and I couldn't honestly give you good advice on it right now sight unseen.

"My attorney said it probably wouldn't be worth bringing him to court.  Maybe insurance will help? maybe I should get a new lawyer?"  Your lawyer is probably right.  Even if you get a judgement you still have to recover it.  One other option:  my dad is hooked up with a debt collector on his properties.  He gets damage judgements with the eviction and sends them to the debt collector.  It seems to work for him.

Tim

Jose,

Your profile says you're a property adjuster.  You should really disclose that you are a property adjuster working for insurance carriers when you recommend people away from public adjusters.  I don't know how it is in your state but in the Florida Adjuster Code of Ethics specifically states 69B-220.201 "(h) An adjuster shall not advise a claimant to refrain from seeking legal advice, nor advise against the retention of counsel or the employment of a public adjuster to protect the claimant’s interest. "

It's written right into the statute that I am the one who protects the interest of the property owner and you shall not advise the property owner to not seek me out.

Tim

Timothy W. · Answer

Cassi,

The real crux of a vandalism claim will usually be establishing "malice" in the damages.  Back when I was an adjuster for insurance carriers, this was the element that triggered coverage or didn't.  Case in point, on one claim I had drawings on the walls by kids.  Not graffiti per se but young kids drawing trees and frankly cute pictures.  That was hard to prove actual malice.  On another claim kids drew racist grafiti.  Easy call for establishing "malice" there.

Tim

Cassi Justiz · Answer

If you have a good landlord policy, I would imagine that it should cover some of the damage. That is FAR beyond average wear and tear.

It may be worth at least getting the home evaluated by a private adjustor to evaluate the damage and put a $$ amount to it. They may also be able to help you with the insurance claim process. They take a percentage of the amount you make from the claim, so make sure you know their fees up front.

Also, I'm not going against what your attorney said because I am certainly not an attorney. But you may get a second opinion from an attorney that specializes in landlord/tenant issues (if your attorney does not). You may not be able to collect from the tenant, but depending on your state you may be able to at least get a judgement against him. If you are able to get a judgement against the tenant, you may be able to sell your collectable debt to someone that buys those notes. Just know that you are probably not going to be able to collect anything from the tenant directly. *Again, this will depend on your state laws. A local real estate attorney would know if this is possible in your area or not*

will insurance possibly cover this nightmare? or help a little?

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