The indispensable role of insurance-friendly improvements
Oct 02, 2023Marketwise column for the Bay Area News Group and its flagships The Mercury News and East Bay Times | Published: September 30, 2023
By Pat Kapowich
Question: It is time to sell the family duplex. Our mother agrees. She lives in the owner’s unit. The second unit has a tenant.
Your column promotes the benefits of presale seller inspections. Does that apply to income properties such as duplexes, triplexes and quadplexes? If so, will that help or hurt the new owner obtain hazard insurance coverage?
Answer: Sellers of two- to four-unit apartment buildings benefit from presale seller inspections. Tenant cooperation is required. Also, it is a must to ensure your family’s duplex is insurable.
Presale inspections can identify potential issues. Stay diligent. The inspectors and your current insurance person can make recommendations. Obtaining hazard insurance can be problematic. That could hurt your eventual duplex sale.
Proactive steps to discourage insurance cancellation policies and keep hazard insurance in place are akin to potential buyers trying to obtain a policy. See a sampling of insurance-friendly improvements:
- Install an easily accessible natural-gas shutoff valve on the gas main line with a gas main shutoff wrench attached by a zip tie.
- Address suggested maintenance items in your presale seller inspections
- Address outdated or faulty plumbing, electrical and roofing
- Consider installing water-monitoring sensors on each unit with automatic shutoff capabilities
- Water shutoff valve(s) on the main line(s) before entering the property
- Insurance companies prefer individually metered gas, water and electricity for apartments.
- Ensure ventilation in the attic, basement and crawl space
- The foundation inspections list flaws and corrections. Addressing or neglecting those items can enhance or ruin the chances of insurability.
- Fire extinguishers are necessary in large and small apartment buildings.
- Ensure the trees and foliage are trimmed or removed for your fire-safety defensible space. Learn which plants are fire-resistant or highly flammable.
If the property is in a wooded neighborhood, visit the Defensible Space website for more information: https://www.fire.ca.gov/dspace.
Suppose you or a family member think upgrades cost too much. That is understandable. We know improvements add value. Deferred maintenance subtracts it. That is conventional thinking. It is unconventional to think that prospective buyers’ hazard insurance could be limited, too costly or perceived as unattainable. If you think insurance-friendly improvements are too expensive, wait until you sell your duplex without them.
Questions? Or are you or someone you know navigating life’s transitions? Let lauded negotiator Pat Kapowich make your next move easy. Visit Kapowich’s website for free area housing data, insights and trends. Or put his artful blend of specialized credentials, decades of experience and endorsed skill set to work for you. Kapowich instills confidence when buying, selling, relocating or resizing homes. Do not just make a move — make the best move. Contact him today, Realtor Pat Kapowich, a career-long consumer-protection advocate.
Office: 408-245-7700; SiliconValleyBroker.com
[email protected] Broker# 00979413
