How to Handle Mold: Ideas & Lease Addendum

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Ideas & Mold Addendum

Mold can be a serious problem, especially as a real estate investor. Every area of the world, except maybe Antarctica, has mold of some kind - and believe it or not, that’s not a bad thing. Microorganisms are vital to our lives but there are some that pose a serious health risk. How do you know what to do?

First, a disclaimer. I’m not a mold specialist. I’m a regular person, who lives in the rainy part of the Midwest. We have mold of some kind everywhere. We have also had various kinds of mold in our rental homes at various times just like our own home. From that experience, this is what I’ve learned.

Prevention is the best medicine! Keeping air flow is key and teaching that concept to those who live and work in our spaces is also important. If it’s employees or residents or our own children, we need to help those around us understand how to be proactive in keeping areas dry and aired out.

For those with residential rental properties, I highly recommend a Mold Addendum for all residents to sign for each home. An addendum is only a document that helps both parties to function in unity and should be viewed as such. Also, an addendum is only as good as those who actually read it, so at all lease signings the addendum is READ ALOUD to the residents with an chance for them to ask questions. All our lease signings are recorded electronically with full consent of all involved. This means that if there is ever a question or misunderstanding in the future - all parties can refer back to the recording.

Obviously, if you have contractors working on a home or commercial property, you’ll want to disclose any potential health risks including mold. Each person’s immune system reacts differently to environmental stimuli, so on all independent contractor agreements, mold is listed as a possibility.

Even in your own home, letting household members understand how they can help minimize mold is a vital part of training and maintaining a healthy standard of living.

The following is a Mold Addendum which we have changed and modified over the years has great tips and instructions applicable for both personal and rental residences. This is a “living” document to which we add, modify, and update frequently. I honestly don’t remember where we found the structure for it years ago. Please feel free to use and modify it, but make sure that it meets the standard of your particular state. Also it is vital to have a real estate attorney review your lease and addendum package periodically.

If you have any questions about the addendum or would like to hear about our personal adventures with mold, please feel free to reach out to our office at info@runningcreekco.com


Questions to Ask Your Insurance Agent to Protect Your Real Estate TODAY!

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Protect your asset with knowledge.

Ahhh property insurance. Who here has read their entire insurance policy? Before everyone raises their hand, let’s be real. Reading and talking about insurance sounds super boring. However, as a licensed agent -turned - financial coach, I’ve seen the devastating financial impact of NOT having the right coverage, especially when folks didn’t even know what to ask. So, protect yourself, your family, and your real estate by starting with asking the right questions.

First, you’ll want to know that insurance agents immediately have a conflict of interest (by admission of the continuing education ethics classes) because they are selling you an Insurance Product and giving you advice with a monetary reward in mind. Even though there are honest agents out there, know that even the best ones have a financial self-interest in working with you, very low level of training on their products, and most are terribly over-worked. Hence the reasons I no longer represent any one company but advocate for my private clients.

Disclaimer: Insurance varies from state to state in crazy, enormous details. I’m a licensed agent and licensed for claims adjusting on the East Coast. You’ll want to check out the questions below in terms of your state and local insurance laws.

When you call this week to review your policy with your agent, you’ll want to be sure to sweetly communicate that you have some questions and ask if they can set aside an hour. Agents are always over-worked and you’ll want to set the tone as positive and cooperative. You need answers! You need to make strategic decisions to protect your hard earned real estate! Your agent needs to be on your winning team of professionals that are working for you to protect your business.

Feel free to copy and print this list of questions for your meeting.

Question #1: “What Companies do you represent? Are they AM Best rated?” *This is the grading scale for insurance companies financial stability. Not a complete safe-guard but definitely helps. Your policy is ONLY as good as the company backing it up.

Question #2: “Does my policy cover the structure of my property at either Actual Cash Value or Replacement Cost?” If it’s Replacement Cost, is it FULL Replacement Cost or partial with Co-insurance? What is the Deductible and how does that work with ACV or Replacement Cost? *Make sure and land here for a while. This is a key component of your policy.

Question #3: “Does my policy have any limitations or exclusions that I should know about?” Ask your agent to pull up a digital or physical copy of your EXACT policy so you can look at the policy language together. Chances are your agent HAS NOT READ the policy for a long time, if ever. Be kind, but watch their response. You want an agent that actually reads what they sell.

Question #4: “How many policies do you work with that are like mine?” **This shows their level of daily expertise in the type of real estate that you own. If you’re the only one real estate investor in the agent’s whole book of business, you should be shopping for a new agent who works with your type of real estate on a regular basis. The insurance industry is quickly changing and is often NOT real estate investor friendly. You need a strong insurance agent who is keeping up on the changes that will impact you.

As you are building your real estate business, you are becoming the watch-dog of your asset and company. With this set of questions, you’ll begin to evaluate what you need and whom you want to work with in the important area of insurance. If you have any additional questions, you are welcome to call our office 740.255.3586 or email me at info@runningcreekco.com.