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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.

Hard Market 101 - Lloyd Sadd Insurance Brokers Ltd.

 

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


How to Find Rental Homes in Rural Areas

When thinking about investing in a rental property, most people will automatically turn to urban homes. There is a lot of untapped potential in rural settings as well, though this is often overlooked by investors. That small-town charm can be very enticing and the idea of friendly neighbors and a slower pace is appealing to many people.

The trick is knowing how to find rental homes in rural areas and evaluating whether they will be a promising investment for you. In this article, we’ll break down some ways to find rental homes in rural areas and weigh your options accordingly.

Seek the Help of Reliable Property Management

If you want to find your rural investment property efficiently, it may be best to seek the assistance of a licenced property management or real estate company. They will be able to present you with an assortment of options based on your desired location, budget and timeline. 

Perhaps you are looking for immediate investment opportunities or are wondering how to find cheap rental homes. In these cases, a licenced team can help. They are knowledgeable about rural legislation and will be able to offer guidance and advice in navigating the purchasing and rental process. 

Additionally, if you are looking to have someone manage the rental property for you, they would be able to take care of this. This would be an excellent option to explore if you do not want to search for the property yourself, or if you lack the knowledge to do so.  

Or You Can DIY

Alternatively, you can take on the search yourself. This is often a great way to learn more about the specific properties, the community and pertinent legislation. It is highly recommended that you study your targeted rural area and become familiar with the housing market and local economy. 

The internet is a great resource for finding this information. You can browse through the properties that are for sale to compare statistics and prices. 

It is also a good idea to physically go visit your desired location. Take a drive through the streets, as you may find properties for sale that are not listed online. Or you can stop at the community center or grocery store, as bulletin boards are still often used by people in small towns to advertise. 

It can also be a good idea to get to know the people in the town. There are usually a handful of ‘must-know’ individuals who are familiar with everything that is going on. 

Insurance for Rental Properties

Many people wonder if you need home insurance for rental properties. The answer is YES — you’ll certainly want to have the proper insurance in place when operating a rental property. 

There are a number of landlord policies available that will provide the coverage you need in this situation. This type of insurance often covers the building itself, as well as other structures on the property such as sheds or fences. Landlord insurance also typically provides liability coverage related to renting out the premises. 

For example, if a tenant is hurt in the home and you as the landlord are found responsible, this policy may help cover any resulting medical expenses or legal fees. In Alberta, you can also require that your tenants have renter’s insurance to protect their personal belongings and offer them some liability protection.

Understand Yourself and Your Market

Even if you are an experienced investor and landlord, it’s important to remember that rural rental properties are still quite different from urban ones. There are certainly some advantages, but there is also a different assortment of risks. It is especially important to understand the ins and outs of rural investing and truly have a passion for it. This will result in a far greater return from your investment property.

Contact Us Today

If you live in the Calgary area and are looking to acquire a new rural rental property (or require assistance with managing an existing one), our team at Emerald Management & Realty Ltd. can help. We are a family-owned and operated business with over 40 years of experience in the property management industry. We look forward to connecting with you soon.


Why Update Your Property Title?

The property title details the most pertinent information about a home or commercial property. Therefore, when it is outdated or incorrect, it can present a huge problem should you need to transfer ownership, obtain financing or repossess a leased property. 

The title report often details the history of ownership, along with other information (such as):

  • The legal property description
  • Name of the property owner(s)
  • Amount paid for the property
  • Encroachments (eg. liens, easements and caveats)

 

Why You Might Need to Update Your Property Title
During the time in which you own a home or other property, you might have some changes in your life that require you to update your property title. This may include:

  • Change of name due to marriage or divorce
  • Adding an owner to the property (such as a new spouse)
  • Removing the name of an owner due to death or divorce
  • Adding a right of survivorship for a child or non-spousal co-owner

You’ll also want to update the property title when a lien or caveat is no longer valid. 

Landlords and the Property Title

When leasing or renting out a property, you may need to have to repossess it to enforce an eviction of the tenants due to nonpayment of violation of the lease.  If you have to evict a tenant and your legal name is incorrect or is not even on the title, you can face conflicts with obtaining a possession order. 

Joint Ownership and the Property Title

Do you own property with someone? Are you on the title? If you aren’t on the title and something happens to your partner, their family may have the right to claim ownership of the property. Consequently, it is of utmost importance that everyone who has a legal right to the property be named on the title. 

The Physical Address on Your Land Title

Any legal notice that is sent to you from the land title’s office will be sent to whichever address is registered with the Alberta land title that is assigned to your home. By registering an address with the land title’s office, you are claiming that you will be fully responsible for receiving any notices that are sent to you. This means that if you don’t end up receiving said notice for whichever reason, you can effectively lose your property rights. As such, changing your address on your legal title is crucial.

Selling the Property

When you sell your property, an outdated title can hinder or delay the transaction from processing. Real problems can occur when there is an owner not named on the title or an old lien or outdated easement still appears on the title work. 

The Process of Changing the Property Title

We are frequently asked how to add a name to a property title. To edit or update your property title, your first step will be to contact the Alberta Registries Spatial Information System. You should begin this process by ordering a current title to see what information needs to be changed. Next, you’ll need to decide which form(s) will be required.

There are different forms for varying situations. For example, if you need to remove a deceased person from the title, you’ll need to complete a Statutory Declaration/Proof of Death form. Land Title requires that you include an original death certificate or a document from the funeral home or cemetery with the form. Another type of form is the discharge paper, which removes a lien or caveat from the title. All applications for changes to the title must be signed before a notary or another authorized representative.

If there are multiple owners on the property, everyone must agree on the changes. This is also true if there is a mortgage on the property. You may have to gain the approval of the mortgagee to make updates to the title.

Condominium Corporations and the Property Title

If you live in a condominium, you could find yourself in a situation where a caveat or foreclosure action is commenced against you for non-payment of fees or condominium contributions.  If your legal name or address is incorrect, you may not receive the official notice of action and incur additional payments. When it comes to legal service, the condominium board or condominium management company has to rely on this information.  So to avoid being unaware in such situations, it is important to update your title with current information.

How Much Does it Cost to Transfer a Property Title or Add a Name?

Registration fees are $15 and may require supplemental documentation when you file. You can file these forms yourself or, alternatively, you can hire a real estate attorney to represent you. Although it may seem simple to do it yourself, you can end up with an invalid title if any mistakes are made. Additionally, fixing an error can be quite costly in the end as it may require you to hire an attorney to successfully fix it.

Where to Change Your Title in Alberta

Alberta residents can inquire about updating their property title at the following location:

Alberta Registries Spatial Information System

Physical Address: Mailing Address:

Service Alberta Building Box 7575

710 4 Avenue SW Calgary, AB T2P 2R4

Calgary, Alberta T2P 0K3

 

Contact Us

If you have any further questions about why you should update your property title, contact Emerald Management and Realty Ltd. today! Our team is always happy to help.