Text/Zheng Dianjia | Modern Insurance Magazine | 2022.10.20 (News)
“Having land and wealth” is an enduring truth in the Chinese world, and the “charter man” and “charter wife” who have real estate and can increase passive income are regarded by many people as a dream career. But behind the seemingly scenery, if you encounter a bad tenant who destroys the house, defaults on rent, or even a tenant who “can’t think of it” and commits suicide, I am afraid that the money-making tool that can steadily collect rent will become a “murderous house” that no one cares about, which can be called the biggest nightmare of the landlord.
Recently, there were two cases of tenants committing suicide in rented houses in China, and the landlord failed to file a lawsuit against the tenant’s family after the fact, and both were ruled by the court.
The common denominator of the two cases is: does the tenant’s suicide really diminish the value of the rental property? Does the landlord have the right to claim compensation from the tenant’s family? Is the tenant’s suicide “intentionally causing damage” to the landlord’s rights? It is often difficult for landlords to successfully claim compensation from the family of the deceased (tenant), and the money-making tools invested with large sums of money have not only become “murderous houses”, but also face financial losses that are not cost-effective in reselling at a lower price.
However, buying and letting is risky, so landlords may wish to consider attaching a “Specified Accident Reduction in Home Price Compensation Rider” to their home fire insurance or home comprehensive insurance.
The “specific accident” referred to in the Specified Accident Housing Price Reduction Compensation Rider refers to the fact that during the insurance period, if the tenant of the insured property commits suicide, dies by jumping off the building, is killed by someone, or dies in the insured residence for unknown reasons, the insurance company will pay the landlord (the insured) a fixed amount of the “housing price reduction compensation insurance money” based on the original agreed insurance amount.
In addition, if the movable property or decoration in the house is defaced or damaged due to the occurrence of a special accident, and the cleaning expenses for cleaning, removal and restoration are required, or if it is necessary to hold a folk religious belief act (such as a transcendence ceremony), the landlord can apply for compensation according to the actual expenses and attach the proof of expenditure, and the insurance company will pay the claim within the agreed amount.
Real estate is a relatively resistant investment target, more and more people use “real estate” as a source of investment or passive income, but natural disasters and man-made disasters are difficult to prevent, in addition to insuring residential fire insurance or home comprehensive insurance to pass on the risk of “natural disasters”, the use of “specific accident housing price reduction compensation riders” to manage the losses caused by “non-natural disasters” is an ideal way for tenants to manage real estate more practically and efficiently in addition to selecting tenants based on “character”.
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