To attract the best tenants and beat out the competition, your investor clients may want to offer unique rental amenities. Some common perks include a spacious kitchen, upgrades to flooring and countertops, or perhaps lawn service built into the cost of the monthly rent. During the summer season, some investors highlight decks, pools, or maybe even a tree house for their rental amenities.
Adding a trampoline or quality play equipment to the backyard may be nice for a family. However, these recreational items can also present some serious risks. The question is, does the prospective fun outweigh the potential danger?
Decks
Benefits for Tenants
Decks are one of the more common rental property amenities. A beautiful deck provides a nice place to enjoy a morning coffee or breakfast, a fun place to entertain friends and family for dinners or a hangout, or a place to get some R&R or a suntan. The bottom line, decks extend the living space to the outdoors without the risk of getting all itchy!
Injuries and Stats
- A recent study by the Consumer Product Safety Commission (CPSC) estimates that between 2016 and 2019, there were around 2,900 injuries and two deaths associated with the collapse or failure of decks, balconies, and porches.
- The CPSC also notes that around 90% of injuries related to decks and porches are attributable to reasons other than collapse or failure. One of the most common is falls from a deck or porch, due to things like faulty railings, poor lighting, slick surfaces, or the negligence of the person who fell.
- The North American Deck and Railing Association (NADRA) estimates that with more than 60 million decks in the United States, around 30 million are past their useful life and should be replaced or repaired.
Risks and Problem Areas
- Any deck or porch made of wood will eventually fail and need to be replaced. Wooden decks have an average life expectancy of 10-15 years depending on climate and level of maintenance.
- Poor construction is the number one reason for deck failure. The most common point of failure for decks is at the connection to the house. They often fail because the deck is not connected to the house by the proper method.
- The second highest cause of deck failure is wood rot. When the moisture content in wood reaches 19%, rot begins. Treated wood lasts longer, but it will also eventually rot.
- Reports from people who experienced deck collapse from rot say there is no warning. The deck doesn’t creak or moan – it simply collapses.
Insurance Coverage
If a deck fails suddenly and someone is injured, your investor client may have coverage to replace the structure itself if that deck failure isn’t related to Wear-and-Tear. Wear-and-Tear is a standard exclusion in all property insurance policies as insurance is intended to cover sudden, unforeseen events – insurance is not intended to reimburse routine maintenance expenses.
As for covering someone’s injuries, if they find your investor client, the property owner, liable for the deck failure, their insurance can help cover an injured third party’s medical expenses. In that case, it may also reimburse them for any legal expenses for defense. However, if the cause of the deck collapse was faulty construction and the investor client is not liable, they better be sure the contractor was properly insured. In that case, the contractor’s General Liability insurance comes into play as they are the party at fault.
How to Avoid a Disaster
Before an investor purchases a property, part of their inspection process should be checking the deck for various factors like structural integrity, railing size, strength, hardware type and condition, staircase issues, and general wear and tear. If any of these items are not in good condition, they may need to be repaired, or if the whole deck is in disrepair, it may be time to replace it. Decks need to be checked every year, and any necessary repairs must be promptly made to avoid injuries. Also, anyone hired to work on the deck should be properly licensed and insured.
Pools
Benefits for Tenants
Most people like pools as a rental amenity. They provide a refreshing place to escape the summer heat, health benefits if you’re the lap-swimming or pool volleyball type, and a fun place to socialize. Whether it’s looking forward to lounging poolside with a good book or seeing how long you can hold your breath underwater, the opening of the pool season is a time of great anticipation.
Injuries and Stats
- According to a report from the CPSC, “there were, on average, an estimated 6,300 pool- or spa-related, hospital emergency department (ED)-treated, nonfatal drowning injuries each year for 2019 through 2021, and 389 pool- or spa-related fatal drownings reported per year for 2017 through 2019, involving children younger than 15 years of age.”
- The same report states that an average of 80% of the nonfatal drowning injuries from 2019-2021, and 73% of the reported fatal drownings from 2017 through 2019, involved children younger than 5 years of age.
- From 2017 to 2019, 67% of reported pool or spa drownings in a pool or spa occurred in residential locations.
Risks and Problem Areas
- Pools are considered an “attractive nuisance” – an item that is so interesting that it would entice a child into entering another’s property.
- If your investor clients do not abide by local regulations regarding these nuisances, they may be held responsible if someone is injured on their property.
- Something as simple as forgetting to put on a pool cover can have fatal consequences.
Insurance Coverage
Insurance policies can vary greatly on how they handle coverage for pools. Some policies exclude coverage for damage to the pool itself and any injuries associated with the pool entirely. Other policies may offer some limited coverage for an additional cost. Bottom line, your investor client should not assume that coverage for a pool is included in their policy, or for that matter, the above-ground pool their tenant decides to erect a week after they move in.
How to Avoid a Disaster
To eliminate the risk entirely, some investors will simply fill in a pool if a property they purchase has one. However, if the property is in a neighborhood where that amenity is expected, a different approach may need to be taken. Investors will want to make sure that they are in compliance with any local regulations regarding pools. Some require fencing around the pool, depth markings around the sides of the pool deck, and life-saving equipment to be in working order at all times the pool is “open.” If your client invests in a small apartment complex that has a pool, they should bear in mind that extra security measures may be required by law, so investor clients must educate themselves accordingly and follow them carefully!
Trampolines and Play Equipment
Benefits for Your Investor’s Tenant
Trampolines can be fun for the whole family and playsets can be a lot of fun for the kiddos. Getting fresh air is good for the soul and having play equipment in the backyard can lead to a lot of laughter and good family memories.
Injuries and Stats
- From 2009-2014, an estimated 243,000 injuries associated with playground equipment were treated each year in emergency departments, reports the CPSC.
- In addition to those injuries, 80,000 people in the U.S. are injured on trampolines each year.
- More than 99% of pediatric trampoline injuries occur on privately owned trampolines located mostly at private residences.
- Playground equipment injuries most commonly occur from using swings, slides, or a composite play structure.
Risks and Problem Areas
Common injuries for these rental amenities include:
- Broken bones (where surgery is sometimes needed)
- Concussions and other head injuries
- Sprains/strains
- Bruises, scrapes, and cuts
- Head and neck injuries (which can lead to permanent paralysis or death)
Tree Houses and Zip Lines
Your investor clients may encounter these rental property amenities as well, and although they may be fun, they also bring the possibility of severe to life-threatening injuries should someone fall or, in the case of the zip line, smack into the tree at the end of the line with increased speed. There aren’t typically local codes that guide the construction of these items, so the safest bet is to remove them.
Insurance Coverage
Often, insurance policies will exclude coverage for physical damage to “Outdoor Equipment” and any injuries sustained while using a trampoline or other play equipment. Investors will need to read carefully to see if their policy has any restrictions on coverage relating to these items. If you and your investor client are unsure or confused about what coverage they do or do not have, don’t wait for something to happen – contact your Sales Manager!
How to Avoid a Disaster
Even though it sounds like a downer, trampolines, play equipment, tree houses, and zip lines may be something your investor clients will want to consider barring from their property’s yard. The risk is very high for these items, and they may be held liable for someone getting injured on their property, even if the play equipment belongs to the tenant. Investors should always specify in their lease if this equipment is allowed – they should review this section with tenants and have them initial the lease to demonstrate they have reviewed it together.
Recap
Investor clients should be aware of the risks associated with these common rental property amenities so they can make wise decisions about providing or allowing these items at their properties. We advise your investor clients to:
- If they choose to allow any of these rental amenities, the investor client should become familiar with their insurance coverage regarding those items. If you and your client don’t understand something or have questions, reach out to your Sales Manager.
- Consider the risks and set rules for pools and outdoor equipment well in advance of allowing someone to step foot on the property.
- Carefully inspect all outdoor equipment before purchasing a property and make any necessary repairs before placing a tenant or remove the risk altogether.
- Consult legal counsel regarding “attractive nuisances” and how local law handles such items. Take the appropriate measures to abide by those laws.
- The lease should have specific language about how pools and outdoor equipment are to be used and who is responsible for upkeep. If those items aren’t allowed, spell that out clearly.
- Review the entire lease with future tenants and have them initial by those items to signify they understand the terms of the lease….and then make sure to enforce it!
