Landlords looking to upgrade their rental by adding a pool have a lot to consider – including the insurance implications. Here’s what you need to know.
Australia is renowned for its long, scorching hot summers. For many, the idea of coming home from a long day and taking a dip in a pool is the dream. That means properties with pools can be highly sought-after – particularly for families with school-age children or in upmarket areas where having a pool is a valued part of the entertaining area.
Landlords looking to improve the appeal of their rental may be thinking about installing a swimming pool or spa.
Before dipping their toes in, landlords have a lot to consider. Things like planning and building permission, cost, installation and tenant disruption, on-going maintenance responsibilities and costs, tax implications for capital improvements, appropriate rent setting and more. And there are also key insurance matters that need to be considered.
Duty of disclosure
Installing a below-ground pool is a major undertaking. The addition of a pool would be considered a material change at the property. Insurers must be notified of these sorts of changes so they can make some decisions of their own – whether they’re willing to assume the risk, at what cost (the premium) and if cover is contingent on any conditions or exclusions. Failing to disclose this information could result in any claim being denied or even the policy being void.
Sums insured
The addition of a pool is a capital improvement at the premises. Be sure to talk to your insurer about adjusting the building sum insured to take into consideration the cost of replacing the pool if it were to be damaged. Remember, your insurer cannot compensate you for a loss if it is not covered by the insurance policy.
Duty of care
Landlords have a duty to ensure that their property is safe. For rentals with pools, this requirement extends to ensuring that any legislation or regulations about pool safety are met.
As a guide, a private swimming pool is one that is associated with a dwelling and which has the capacity to contain water that is more than 300mm deep.
It’s important to appreciate that the safety requirements for pools are not limited to below-ground pools. Depending on the jurisdiction and applicable laws, the requirements may also apply to an above-ground pool, spa/hot tub/jacuzzi or any pool deeper than 300mm.
Any private pool or spa at your rental must have appropriate safety barriers according to the building laws enforced by local government and the residential tenancy laws in your state or territory. TIP: Don’t forget to include the cost of the fence/safety barriers in your building sums insured.
It’s a common misconception that fencing is not required if the pool is not a permanent feature. Portable pools and spas (above-ground or inflatable) are expected to have the same fencing as a permanent pool or spa.
As portable pools/spas can be relatively easy to erect/dismantle, tenants may look to putting them in the rental themselves. Regardless of who installed the pool, the safety requirements must be met. If your tenants want to put in their own pool, be sure to discuss the matter with them so that the legal obligations can be met.
Maintenance
Carefully consider any responsibilities that you assign to your tenant in relation to pool maintenance. Be mindful of any activity that could pose a risk (e.g. handling chemicals or cleaning out filters). It may be wise to engage a professional to look after the pool and only require your tenants to undertake minor upkeep such as topping up the water, scooping out leaves and general cleaning. Be sure to include any tenant responsibilities in the tenancy agreement too.
Liability
As the property owner, you are responsible for ensuring that the premises is safe and that any legal requirements, such as pool fencing, are complied with.
Legal liability insurance affords the policyholder protection in the event that they are found liable for another person’s injury or loss sustained at the premises. But it does not absolve the owner of their legal obligations. The policyholder must ensure that any applicable laws are adhered to. If you fail to do this, you could find your insurance is void.
As there are circumstances where the tenant may be held responsible for an accident at the rental (known as occupiers’ liability), it’s important they have their own liability insurance. It should be made clear to your tenants that your landlord insurance covers your legal liability – not theirs.
No-one wants a landlord to suffer the insurance equivalent of a belly-flop. Before taking the plunge and installing a pool, be sure to understand your responsibilities – legal (legislation and regulations) and insurance (conditions of cover). And make sure you have adequate cover for the property. That way you’ll keep your tenants and your investment property safe.
*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are there, contact 1800 661 662 if you have any questions.
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