Challenges with renting out space in your home

One of our customers rents out space in his basement. Recently, he has encountered challenges with his tenant who had hired a cleaning lady. She had slipped on the stairs and injured herself. Now, she is seeking compensation because the injury put her out of work for some time. Our customer approached us to discuss his options.

He found out about the cleaning lady’s accident weeks after the fact. We asked him to write down a detailed account of the incident and determine the remedy she was seeking.

In this type of situation, tenants bear some responsibility because the injury occurred in their portion of the house.

One workaround is for tenants to carry tenants’ insurance. If the tenant had the right coverage, the cleaning lady’s claim would have gone to the tenant’s policy instead of the homeowner.

Ultimately, the homeowner will be responsible regardless, but a tenant’s policy serves as a buffer between the homeowner and potential risks arising from the tenant.

What should happen in this situation is that we would go to the tenant’s policy first before holding the homeowner responsible. Otherwise, we have no choice but to go after the homeowner’s policy.

While homeowners can’t legally oblige their tenants to carry insurance, they can be more selective in who they do business with.

Another benefit for tenants is that they can have their belongings protected. If fire or theft occurs, tenants’ insurance will help them cover the losses. Even though tenants usually don’t have much stored in their apartments, they probably want to avoid shelling out a few thousand dollars to restore their items.

The cleaning lady could have benefited from insurance as well: if she had disability coverage, the insurance company would have given her income replacement for the time she was unable to work.

In other words, the right coverage would have made everyone whole and complete. Contact us today to ensure you’re protected.