The indispensable role of insurance-friendly improvements

It is a must to ensure your family’s duplex is insurable.

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• Address outdated or faulty plumbing, electrical and roofing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.

For Housing Market Data in your area, visit my webpage for trends here. Do you have questions about home buying or selling? Full-service Realtor Pat Kapowich is a Certified Trust and Probate Specialist, Certified Real Estate Brokerage Manager and career-long consumer protection advocate. He is based in his hometown of Sunnyvale, California. Office: 408-245-7700; Broker# 00979413 Pat@SiliconValleyBroker.com