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Property Insurance Market Update

The shift in the insurance market that started in 2018 continues to impact condominium corporations and multi-family rental properties across Canada.  Unfortunately, the hardening of the insurance market and aggressive changes by insurance companies continued into 2021 with Covid-19 hitting the insurance industry.

Like many markets, the insurance market is cyclical. In the recent past, benefits from a softer market were enjoyed by many in the property management industry. However, the long-term results of rising claims and reduced profitability, further impacted by a world-wide pandemic has the property management industry in a hard market.

The property and the real estate market are leading the lines of the insurance coverage hardest hit[1] by the hard market cycle. This is due in part from increases in property claims, water damages, natural catastrophes, and fires.

In addition to the increased claims, the other factors impacting property management & real estate insurance market include:

Increase in replacement cost valuations on an average of 7-10%
Increase in the number of claims and frequency of claims made by condominium corporations and stratas (“claims inflation”)
Repair costs have increased on average of 10%[2]
Insurance industry recorded an underwriting loss of $244 million for the period and an overall loss of $5.1 million[3]
Historic low interest rates
Increase in severity for liability losses (“social inflation”).

Equally important, there has been a decrease in the number of insurance companies in Canada that are willing to insure real estate, especially condominium corporations. In such cases, capacity is restricted resulting in less insurance supply. For this reason, the increase demands leads to increased premiums.

Reported increases in the media highlighting higher premium rates and shrinking coverage capacities confirms what we are seeing and hearing from our partners and services providers. Alberta is not unique as this market is being throughout Canada and the United States.

Emerald Management & Realty Ltd. has been actively working on this year’s insurance renewal for properties. With many of the leaders in the insurance markets indicating hard market our team has been heavily involved in navigating the current insurance market with our team and master insurance partners to mitigate the financial impact from the changes in the marketplace to achieve the best rates for our clients.

The following is a snapshot of the strategic marketing undertaken by our team to aggressively respond to adverse market conditions. Our goal is to mitigate the financial repercussions impacting condominium corporations and multi-family rental dwellings across Canada.

How to get ahead in a hard insurance market?

With insurers struggling to meet demand, there has been an increase in information required. Many insurers are placing requirements such as the: mandating preventative maintenance programs; replacement of roofs; and even, mandating improvements to boiler & mechanical systems and the replacement of hot water tanks & furnaces.

Insurers want more robust information, and it is important that you are prepared. It is integral that preventative maintenance programs are in effect and inspections are up-to-date. Properties need to be well maintained and risk assessments completed. In situations where the insurer requires replacements or improvements, the time taken and information gathering helps in the long run when it comes to renewal conditions.

Our valued partners at Lloyd Sadd Insurance Brokers Ltd. further recommend that to get the best results in a hard market you need to:

Start early
Provide a robust renewal submission highlighting your maintenance programs and property management standards
Focus on claims mitigation
Keep property appraisals up to date
Build partnerships and promote loyalty[4]

The early intervention taken by Emerald Management & Realty Ltd., including gathering and preparing information to promote the properties and condominium corporations has been presented and marketed to various insurance companies. Early indications and feedback from the insurers indicate that the process has proven to assist with renewals.

Further to the current insurance environment, Emerald continues to work on behalf of its clients to minimize the impact of this shift on pricing to maintain the benefits of our insurance program.   We continue to be focused on achieving the advantage of our low corporate rates, reasonable deductible levels, prompt claims management, rental revenue loss coverage, vacancy coverages.

To discuss the Emerald Management & Realty Ltd. master insurance program advantage and any concerns you have with your current property coverage please contact our team today.

For more information about the hard insurance market visit:

[1] Hub International 2021 Hard Market Information Bulletin

[2] BFL Canada Insurance Services Inc. Market Insight December 2018

[3] Navacord Hard Market Insights

[4] Lloydsadd Hard Market Insight 2021

Why do property managers do inspections?

Importance of Property Management Inspections

Property Inspections are a key to property management systems and processes … and again this year, it looks like inspections will be completed very differently than they have in the past! Inspections: pre, during and post COVID-19, continue to evolve while their importance remains relevant as ever.

Rooftop views captured of downtown Calgary during recent condominium property inspection (May 2021)

Moreover, inspections are done for a variety of different purposes and reasons. For example: checking for damages before and after move-ins or move-outs; inspecting work completed by contractors, making sure your property’s first impression meets the grade; and, helping to plan for preventative or necessary repairs. Likewise, inspections are done on different schedules (ie) weekly, monthly, semi-annually and annually. It often depends on the purpose and property needs.

Another important purpose for property management inspections are to ensure that you are meeting your insurance obligations when it comes to vacant properties. For instance, insurance companies can require vacant inspections at certain frequencies depending on the policy.

Ultimately, the goal of any inspection is to protect the equity in your property for the enjoyment of owners and residents.

Essentially, the purpose of an inspection is to observe conditions, assess maintenance programs and note opportunities for improvement. Furthermore, they provide a mechanism for reporting back to property owners and condominium boards. This helps facilitate conversations to protect that value of the property. Further, this integral procedure helps a property manager support the owner or condominium board in making informed decisions. Having knowledge is key in taking a proactive approach and optimizing the occupants use and enjoyment.

Depending on your property management agreement, property inspection help a board or owner make informed decisions about maintenance requirements and protect the value of their asset.

Often a condominium community or apartment building will employ a resident manager or building operator to support this mission of conducting regular site inspections. Other times and depending on your budget along with the engagement of your condominium board, committee or owners, everyone can assist with inspections. Ultimately, everyone’s support as a team vested in the success of your property and being the “eyes and ears” assists to catch property issues and maintenance concerns so that problems can be addressed before they escalate into bigger issues.

Since every property and condominium corporation is unique, it is important to ask your property management company how they inspect the properties they manage and their recommendations on how they can help support effective solutions to meet your expectations that are in-line your budget requirements.

The following are questions to consider when it comes to inspections:

Why do I need regular inspections?

Regular inspections help avoid bigger problems from taking you by surprise. Regular inspections are great for inspecting common areas and the exterior. With COVID19 and everyone’s safety top of mind, the inspection of interior spaces is being handled a little more creatively. The use of ZOOM, FaceTime and Video Conferencing have proven fantastic tools when quarantine concerns and social distancing rules apply. Being flexible and resourceful is more important than ever – ‘where there is a will, there is a way”.

How often do you inspect the exterior of the property?

TIP: A drive by inspection can be done frequently. While it is less formal, this type of inspection may be very acceptable for frequent visits.

A full-scale exterior inspection is great for seasonal changes or after large infrastructure repairs. Typically, a full building or 100% inspection is done on an annual basis, but some areas or features of your property or condominium corporation may need to be checked on more frequently.

Again, this is something you can schedule quarterly or when session changes – basically at an interval that makes sense for your property. Do you have a goal around capital expenditures? Are you reviewing potential improvements relating to your reserve fund report? Go through your list, bring along your smart phone and start walking! Check off items that are in good shape and make detailed notes of anything that needs fixing. You can always prioritize a plan of action later … and don’t forget to take pictures! Your property management company will have tools and a process in place to assist with their internal controls and reports when it comes to reviewing needs and arranging for repairs and maintenance.

Who completes the property inspection?

As noted above, the property inspection is integral to the successful management of any property and often a responsibility assigned to the property management company. Inspections can be completed by the property manager, however; they can also be completed by the broker, team manager, support staff or valued contractors.

Inspections are valuable tools to assess what needs to be done to keep your property in great condition, maintain value and potentially reduce the need for significant repairs. Sometimes, you may feel that more frequent inspections are required to support your goal with respect to the overall resident experience and asset appreciation.

A successful inspection requires a property manager to be watchful and observant, looking at property element with scrutiny balanced with the understanding of the owners goals and budget instructions.

While this may be out of the scope of your property management services, depending on your needs and expectations, you may wish to add-on additional inspections for a set fee or may look at engaging a professional inspection company.

What’s on a property inspection checklist?

This varies from property to property and depends on the type of inspection you are completing.

For example, a bareland condominium corporation or a single family home would have different elements compared to an apartment building or hi-rise condominium. Larger properties will have more complex mechanical checks supported by preventative maintenance programs and annual certifications.

Depending on the type of property your property manager is inspecting, the following is a quick sample of what a property manager would look at during a routine inspection:

Windows

Check to see if there are any signs of moisture
Do opening and closing devices work
Are there any visible window seal issues?
Are the windows clean
Are moisture issues evident on ledges
Look for any irregular concerns

Common Hallways

Inspect the walls, floors, and ceilings for damage and cleanliness
Pay attention to HVAC systems and venting
Is emergency signage working
Are fire doors closed
Inspection dates on fire extinguishers
Look out for signs of rodents or bugs
Are hallways free of hazards

Exteriors

Note the condition of the siding or brick
Inspect for litter
Review exterior landscaping
Inspect exterior doors to ensure they close property and are secure
Look at sidewalks for hazards
Review signage
Examine balconies for bylaw infractions or potential repairs

Risk management

Review factors affecting health such as cleanliness
Inspect items that support well-being and safety of residents
Survey property operations and resident liaison activities
Assessment of risk
Review of security concerns or potential hazards

Again, the type of inspection needed depends on the type of asset and the purpose of the inspection (ie) preventative lifecycle, periodic tenant inspection, building exterior visual assessment to meet city bylaw requirements, etc.,.

Emerald Management & Realty Ltd. Is a licensed property management brokerage. Its team of licensed property managers understands the importance of property inspections and the importance of teamwork when it comes to managing real estate assets and condominium corporations. We pride ourselves on a reputation grounded in integrity, reliability, and value for service. We are excited for the opportunity to help you to define goals, review strategy options and understand your property maintenance needs and can help you:

Evaluate performance and progress
Identify successes and problems
Make long-term decisions, and
Develop long term property maintenance plans.

All of this starts with a property inspection and a conversation about your goals! Contact us today to learn how Emerald Management & Realty Ltd. can help your condominium corporation and condo board plan for the future. In any condominium corporation, this is an essential part of strong management and potentially prevent painful situations like expensive special assessments. For more information on the wide variety of services Emerald Management & Realty Ltd. offers, please contact our team at 403-237-8600.

How to Spot Fake Landlord References

Most landlords that are looking for new tenants are always asking for reference letters and/or some level of reference information, which is an essential part of the tenant screening process. Unfortunately, it is not uncommon for prospective tenants in Canada and elsewhere to provide fake landlord references. The majority of prospective renters are honest, unfortunately, there are some “bad apples” out there.

Regrettably, those who provide fake references don’t do it for good reasons. They often aim to conceal problems including late payments, bankruptcies, anti-social behaviour, and damage to the rental property or eviction. It is in the landlord’s best interests to identify these troublesome tenants before it is too late.

Fake landlord references can be hard to identify, especially if they are done by professional scammers who do it as a service. Still, it is possible by personally checking the references and paying close attention to what they say while double-checking the contact information, property or personal tax information, and employment records.

Here are several practical tips from Emerald Management & Realty Ltd. on how to be on the lookout for fake landlord references every time when sourcing a new tenant.

1.Personally Call the References

Personally calling the references is one of the best ways to check if they are real, and this can be done in a number of ways. One of the best possible approaches is to call as a tenant inquiring about how long they’ve been a landlord or renting out properties instead, which might have been expected. If a reference is a fake, they can be taken off guard, stumble when answering, or unexpectedly hang up the phone.

When the reference is a fake, they might be prepared for such a check and provide applicable information. Another alternative is to ask for back up information relating to employment and documentation from their employer.

2.Check Tax Records

If you are dealing with a private landlord, another way to verify whether the landlord’s reference is real is to check the owner’s name in the property tax records. If the property owner’s name matches that in the reference, this check is complete.

However, if the name is different, it is not yet a signal that the reference is a fake. The previous landlord could have sold the property, or the reference could be given by a property manager.

If the names in the reference and property tax records don’t match, ask the person mentioned in a reference letter whether they own the property. If they confirm that the property is sold, ask the name of the next owner. If they don’t remember or don’t provide a clear answer, there is a high chance it is a fake.

3.Analyze the Reference Responses

When speaking to a landlord, it is advisable to ask specific questions about the rent and the rental property that only a landlord might know. For example: if the parking is included, if the rent includes amenities such as a pool, terrace, or clubhouse, and whether the tenant had a pet. If they cannot give an answer or provide vague responses, it can raise a red flag.

Meanwhile, too enthusiastic responses can be just as suspicious as vague ones since fake landlords, friends, and relatives often overdo it. If they provide too much information when not asked or if the responses are too personal, it can be a sign that the reference is a fake.

Get Help from Professional Property Managers

Although landlords can often identify troublesome tenants by spotting fake landlord references, the mistakes can be costly and time-consuming. At the same time, turning down a tenant for the wrong reason can result in a lawsuit due to non-compliance with the Fair Housing Act.

Another alternative is to get help from expert property managers who have access to various professional resources and are well-versed in due diligence on prospective tenants. To find out about Emerald Management & Realty Ltd.’s services to assist landlords and our effective and proven processes provided to move swiftly through tenant credit checks, call us at 403-237-8600 or contact us today.

APARTMENTS FOR RENT IN CALGARY

*Prices & availability subject to change

THE PERFECT PLACE TO CALL HOME!

738 – 14 Street SW, Calgary, AB

Proudly managed by Emerald Management & Realty Ltd.

SOHO ONE is conveniently located in one of Calgary’s most dynamic and amenity-rich neighbourhoods, in the community of Beltline. Beltline is bounded on the south by 17th Avenue, on the west by 14th Street West and on the east by the Elbow River.

Immediately south of Downtown Calgary, SOHO ONE is just 2 blocks from Safeway, parks, and the vibrant 17th Ave SW. From medical care to transit, and fine dining to boutique shopping, everything you might need is within a short walking distance. For good reason, the community has earned its reputation of being one of Calgary’s prime lifestyle locations for eclectic night-life, restaurants and urban culture.

Proudly management by Emerald Management & Realty Ltd., SOHO ONE features spacious suites, galley kitchens and laminate flooring. The lighting from the large windows showcases ever changing views of the seasons experienced in Calgary. Balconies are expansive and perfect for summer urban patio living!

Schedule a Tour TODAY!

Call our friendly leasing agents at 403-237-8600 to schedule a tour or call our on-site resident manager today at 403-909-8119! Our team at Emerald Management & Realty Ltd. looks forward to answering your questions and touring you through your next rental home located in Calgary, AB at SOHO ONE Apartments.

Summary of features at SOHO ONE Apartment:

Secure entry controlled by FOB card access
Upgraded 1 & 2 bedroom suites
In-suite storage PLUS additional storage locker space available (on request)
Heat & water included
Large windows that feature outstanding inner city views
Great walkability
Full time Resident Manager
Package delivery lockers
Coin-less laundry
Concrete building
Elevator
Parking available at $current rate/month
Cats negotiable on approval and payment of $current rate non-refundable pet deposit.

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