At the time of writing I am sitting in our Gisborne office after spending time with our team helping and supporting them as they deal with the fallout of Cyclone Gabrielle.

It is just over a week since the cyclone hit and caused widespread disruption and damage across much of Hawke’s Bay and Tairawhiti region, where we manage many properties.

It has been upsetting as well as inspiring to see these communities rally around each other in the post-cyclone clean-up. Wairoa is particularly affected, with much of the township north of the river flooded, leaving a trail of silt and destruction. One feels for the thousands of people who have borne the brunt of such a devastating disaster.

From a property management point of view it is difficult to plan for such events, although history tells us they will happen, and with the onset of climate change one must suspect that such events may become more regular.

PATH TO REPAIRS

What we try to do as a company is pre-empt issues we can deal with. Even though there are always things that could be done better, overall I am satisfied with how we handled such a situation. We manage thousands of properties that were in the cyclone’s projected path.

Before the cyclone hit we contacted our property owners, asking them to confirm we had the authority to act when dealing with their insurers. We also wrote to our tenants to advise them on the best way to contact us for repairs as well as ensuring they followed Civil Defence instructions.

Most maintenance was done through our Tenancy Concierge service, which we partner with maintenance software partners Tapi.

Tapi is an outstanding Wellington-based company that ensures we have a seamless work flow on maintenance requests we can track and initiate, meaning maintenance is easy to report and administer.

We now have QR codes on most of our properties that allow tenants to easily upload images of repair requests and Tapi’s artificial intelligence can give accurate estimates on costs of specific repairs.

What we could have done better is advise property owners to check their insurance and educate tenants on the need for contents insurance. Unfortunately, many tenants no longer bother getting insurance, and this is due to recent law changes limiting a tenant’s liability for accidental or careless damage. Lots of tenants no
longer see the need to insure their contents, meaning many would have lost their possessions post-cyclone. This is avoidable as tenant insurance is not expensive, and for many who are adequately insured it means they can move on quicker with less financial burden.

‘How many take on a landlord’s extension insurance for loss of rent?’

MINIMAL IMPACT

From a property owner’s point of view, nearly everyone has some form of insurance on their property. However, how many take on a landlord’s extension insurance for loss of rent?

The answer is very few. I look at insurance the same way you look at hiring a property manager: you do not particularly want to make the purchase, but the day you need it you are glad you did.

Similar to what we saw in Christchurch post-earthquake, property owners who had landlord extension cover continued to receive rent, so the impact was minimal. A professional property management company minimises the risks associated with being a landlord but cannot take on the liability and cost when events such as this occur. Many tenants will see their tenancies end due to their homes being red or yellow stickered.

The property owner will still have a mortgage to pay, and although banks will be supportive, there is a limit on how long they can provide such support. Maybe now is a timely reminder to investors to assess the current insurance status of their portfolios and ascertain if they are adequately covered.