The following questions relate to the traditional landlord-tenant relationship in manufactured home parks; specifically, that the landlord rents the dirt to a tenant who owns their manufactured home. If a landlord has park owned homes, they should have their own insurance. Often times, rental agreements may require the tenant to list the landlord as an “additional insured”. Sometimes the landlords are listed, sometimes they aren’t. Sometimes they are listed as “Co-Insured”. The questions below are primarily coming out of the wildfires where several parks have been decimated. The homes have been destroyed, the tenancies have terminated and in some cases, the tenants have taken their insurance money and run (even when a portion of those insurance dollars were to be for “clean up”), leaving the debris behind for the landlord to deal with.
At the outset, I do not believe that we are dealing with “renter’s liability policies” that are defined in ORS 90.222. Rather, these are homeowner policies that protect the home. Assuming it is the latter, I do not believe ORS chapter 90 prohibits a manufactured home park landlord from requiring a tenant to name a landlord as an “Additional insured” (defined below). If these were “renter’s liability policies” then there are specific prohibitions in ORS 90.222 that prohibit a landlord from requiring a tenant to name a landlord as “Additional Insured”.
Question 1: Our Lease states that Tenants must return the space in a clean first class condition. We also are on all of the Tenants' insurance as a “co-insured for purposes of notification.” Only one insurance company made the check out to the Tenant and us. Since they are to return the space clean and we are listed as co-insured, should the insurance companies have listed us on the checks? All the Tenants received monies for Debris Removal, do we have a right to that money? (only 30% gave it to us). And if so, how do we handle getting it?
Answer 1: Without reviewing the specific insurance policy language at issue, it’s difficult to answer the questions, as insurers may define “co-insured” differently. That said, generally speaking, a “co-insured” is so designated for the purpose of receiving notice from the insurer in the case of pending cancellation of the insurance, for non-pay or other reasons. Simply being named a “co-insured” does NOT necessarily provide the full rights bestowed onto the First Named Insured, i.e. the person or entity named on the declarations page of the policy as the “insured.”
The insurance company likely was not under any obligation to list the landlord as an additional payee on any checks it issued to its insured (the tenant) just because the landlord was listed as a co-insured. While the landlord likely has a right to pursue the money from the tenant (based on a claim of breach of contract – the rental agreement), the landlord almost certainly does not have a viable legal challenge against the insurance company, but again, the policy should be reviewed by an attorney. In most cases, a landlord’s only remedy is to sue the tenant in small claims court for the amount to make the landlord whole – mainly, to leave the space in a first class condition. Since this would not be the collection of rent, pursuing those type of damages would not violate the current restrictions on attempting to collect unpaid rent.
It may be helpful to explain the difference in the terms “First Named Insured,” “Named Insured,” “Co-insured,” and Additional Insured.” As stated above, the “First Named Insured” is the person or entity named the insured on the declarations page. There is only one First Named Insured on any insurance policy. They are bestowed all of the coverages provided under the policy, have the obligation to pay the premiums, and are the ONLY person who can make any changes to the policy.
A ”Named Insured” is a person or entity that is formally added to the policy, and also is bestowed all of the coverages provided under the policy, but they are not responsible for paying any premiums, nor can they make any changes.
A “Co-insured” is almost always defined as a person or entity who is guaranteed to receive notice from the insurer in the case of pending cancellation of the insurance, for non-pay or other reasons. A co-insured is NOT bestowed any rights to any of the coverages provided under the policy.
An “Additional Insured” (which is what the landlords should probably insist on being named in their tenant’s insurance policies moving forward) is a person or entity that is specifically named in the insurance policy (typically via an endorsement) and is bestowed certain rights under the policy, which are also typically explained in the endorsement. A common example of an additional insured is in the construction context, where the General Contractor will require that it be named as an additional insured by all of its sub-contractors for any claims involved a specific construction project. Please note that a Landlord would also want to also be listed as “Co-Insured” because they would want to continue to get notice if a policy is not renewed.
Again, assuming these are not “Renter’s liability insurance” policies as found in ORS 90.222, then I do not believe there is a restriction.
Question 2: Some tenants have told me that they have been told by a State Representative not to sign the right of way and to not give the Landlord's their Debris Removal monies. The State Representative feel all parks should wait and let FEMA/ODOT and State of Oregon do the cleanup free. Naturally there have been HUGE problems with this, the time it takes, devastation to roads and concrete, etc. Many parks like us are trying to do some of the work ourselves and hire some of it too. The sooner you are open, the more likely people can buy homes and get in. Anyway, our Tenants are now refusing to give us their Debris Removal money. The State Rep has recommended the tenants contact Legal Aid. It's a nightmare.
Answer 2: This whole situation is a nightmare. I believe (and John Van Landingham agrees), that upon the destruction of the home, and assuming the tenant has vacated the space, the tenancy ended. Because the tenancy ended, the tenant no longer has possession of the premises and has no authority to give permission to access the premises. What’s the best way to handle the stuff that’s left behind? Assuming that you can affirmatively say that the tenant has no desire to assert any ownership over the debris remaining (i.e. it’s a burned out home and nothing is salvageable), you should send an abandonment notice (please remember that DWT can help with this). Upon the completion of the abandonment, you can dispose of the material as you see fit. As with the first question, if the rental agreement says the tenant is responsible for any cleanup of the space, you could seek compensation from the tenant for the clean-up costs, although actually getting compensation may likely be difficult. Hopefully, the Legislature will address this. The state representative is smart to advise tenants to contact Legal Aid; however, a tenant would be smart to contribute the portion of their insurance that was attributed to the clean-up and obtain a release from their landlord.
Question 3: Can we use the cleanup money that the few Tenants gave us to clean up their space?
Answer 3: Yes. Additionally, if tenants give you the money they received from insurance to clean up their space, I would not recommend any further action against the tenant (even if the clean up money is not adequate to clean up the space).
Question 4: Should we have been listed on the insurance checks?
Answer 4: Again, without reading the specific language of the policies, we cannot say for certain, but if the landlord was only listed as a “co-insured,” the carrier was likely under no legal obligation to list the landlord as an additional payee on checks it wrote to its insured, the tenant. Being a co-insured only guarantees that you will be notified if the policy was being cancelled. If you were listed as “additional insured” as defined above, then you may have a claim against the insurance company.
Question 5: Do landlords have any rights to Debris Removal Insurance money?
Answer 5: Probably, but it is based on a claim of breach of contract on the part of the tenant, and likely only if the landlords are not otherwise compensated by FEMA or the state for cleanup. The landlords almost certainly do not have any viable legal claim against the insurance company.
Question 6: If we have a right to the Debris Removal insurance money, how do we handle getting it?
Answer 6: As stated above, the landlord’s likely only avenue for getting Debris Removal insurance money would be to pursue those monies from the tenant, based on a breach of contract claim, i.e. the rental agreement.