[RPPTL LandTen] Landlord Mandated Insurance

[Mike Davis]

All
I am interested in fellow listserv members' input on landlord mandated insurance.  I can't find anything in Hauser or any cases directly on point that speak to insurance, insurance charges, or having the landlord listed as the "additional interest or interested party" in the insurance.  Further, I also couldn't find anything (or am looking in the wrong places) regarding the issues of the landlord potentially falling into becoming an insurer or selling insurance.

I think the key issues that I have seen on landlord mandated insurance lease provisions are: (Assume the facts below are supported by appropriate lease provisions.)

  1.  Can the landlord require a tenant have liability insurance in a minimum amount?  If so, can the landlord require that the landlord be listed as an additional interest (to be notified if the insurance lapses)?
  2.  If the tenant does not have the required insurance, can the landlord force place the required insurance on behalf of the tenant and pass-through the premium charges to the tenant (as "additional rent")?  Assume the landlord is charging the tenant only its actual costs of the insurance.  I don't want to get into the quagmire of the landlord making a profit from the insurance.  That seems to me to be a clear-cut case of landlord selling insurance which I believe requires a license.
  3.  If the tenant does not have the required insurance, can the landlord charge a "penalty" (as "additional rent') while the tenant is in non-compliance with the requirement?


  1.  My thoughts are there aren't any residential landlord/tenant statutes or case law on insurance.  Therefore, absent applicable laws in insurance regulation, the landlord can require it.  Since the landlord can require it, the landlord can require reasonable conditions, such as additional insured to be informed of policy lapse.  I have a concern that a court may find that requiring renter's property insurance to cover the tenant's property would be seen as a benefit to the tenant.  Requiring renter's liability insurance may be seen as less for the tenant and more for the benefit of the owner.  But a lot of lease provisions are for the landlord's benefit.  I also think that, if the landlord does require liability insurance, the landlord should not require a specific company to avoid allegations of "directing" or "collusion".
  2.  A "forced placement" doesn't seem to be a "penalty" as the tenant is getting a benefit.  It can be argued that this is the landlord remedying (after notice to the tenant) akin to the landlord remedying in other rental situation.  Single family home rentals, tenant responsible for lawn, pool or spa care, 7Cure with warning that if not remedied landlord will remedy at tenant's expense to avoid damage to lawn, pool or spa.  Multifamily rentals, the only thing that came to mind was tenant responsible utilities (electric or water), 7Cure with warning that if not remedied (turned on) landlord will remedy at tenant's expense by putting in landlord's name to avoid damage (mold, dead lawn).
  3.  In general I think that penalties in L/T cases are disfavored by the courts.  Rather than a penalty, the appropriate landlord response should be to follow the seven-day process or possibly to self-remedy with forced placement.


Mike
Michael Geo. F. Davis
Attorney at Law
The MGFD Law Firm PA
Countryside Colonial Center
2753 SR 580, Suite 209
Clearwater, FL 33761-3351
P 727-726-1900
F 727-726-7440
mike at mgfdlaw.com
Primary Eservice: eservice at mgfdlaw.com
www.mgfdlaw.com<http://www.mgfdlaw.com/>

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