That time I almost got sued

About 2 years after starting my rent roll, someone threatened to sue me…

And I mean, legitimately threatened…

Let me tell you the story.

Bill and Betty applied for a rental property through me (obviously, their names have been changed).

They checked out well…

Good rental history…

Good job…

He was a local bank manager…

She was at home with the kids…

Super cooperative with the application process…

So, I approved them.

And once they were in the house, everything changed…

My first warning was their bond cheque (yes, a bank cheque) bounced…

Then, within a month of moving in, he lost his job as a bank manager…

Next, they reported a cockroach infestation…

Which was weird, because the house was SPOTLESSLY clean – the previous tenants were remarkable, and the landlords were fanatical about having pest treatments regularly.

Then, as you probably expected… they fell into arrears.

Over 14 days in arrears, I served a termination notice.

We went to NCAT, received an order for vacant possession.

The tenants didn’t move out, but continued to complain about cockroaches.

We had a pest control company check out the cockroach situation and they couldn’t find the cockroaches.

So, I didn’t approve a pest treatment.

And on top of this, I discovered that “Bill” was being investigated for a violent crime…

It just was going from bad to worse…

Then, just as I was organising a warrant of possession, so that I could get a sheriff to evict the tenants, Bill sends me the email that put fear into my heart…

“I’m going to take legal action about the cockroaches and claim compensation for replacing all my appliances, plus relocation costs”.

Then, in the CC section of the email, I see that it’s been copied to his solicitor…

He’s serious.

He’s actually going to sue me.

Now, I know what you’re thinking.

He’s not going to win a law suit.

I had evidence from an expert that there wasn’t a cockroach infestation.

But whether I won or lost, this was gonna be expensive and stressful.

So, I called my insurance broker, to find out what to do.

And this is where it gets interesting.

My insurance broker told me that my professional indemnity insurance policy required that I notify them of any threat of (or possible) litigation.

She told me that if I hadn’t reported this threat, but later needed to make a claim, I might not have been covered.

I had to report every single threat or possibility.

Just in case.

I didn’t know this!

But BOY was I glad I made that phone call!

Now, it turns out that he didn’t sue me.

Actually, I think he’s in jail now, for that violent crime I mentioned before.

But the moral of this story is…

Read your insurance terms and conditions!

I didn’t know that I had to notify my insurer of any threats of litigation.

And I didn’t know that if I hadn’t reported that threat, I might not have been covered!

Scary thought, right?

I’m not saying that your terms and conditions will be the same, because I really don’t know.

But I am saying PUH-LEASE read your policy, so you know what you’re covered for, and what you’re required to do!

And if you’re about start your own rent roll from scratch, make sure you get a decent insurance broker to help you get protected!

Now, if you ARE about to start your own rent roll from scratch, be sure to download my checklist for starting a rent roll by clicking here.

If you haven’t seen my last blog titled How I went from being TERRIBLE with video to being TOTALLY okay with it! be sure to check that out next!

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2 Comments. Leave new

  • I spoke to my insurance company about the threat of a claim – then the following year, they put my premiums up, even though I had NOT been sued, and nothing came of it. You just can’t win with insurance. One of those can’t live with, can’t live without things I guess

    • Ellen Bathgate
      July 10, 2018 4:12 am

      I know Rachael! We can’t possibly NOT have insurance… but they’re fast to charge us more, even when we don’t make a claim!


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