For multifamily property owners, maintaining and increasing Net Operating Income (NOI) is always top of mind. But what happens when one resident’s mistake leads to thousands in unexpected repair costs?
From smoke damage to sewer backups, resident-caused incidents are a recurring—and often under-covered—threat to your bottom line. Relying solely on security deposits or general liability coverage often leaves property owners absorbing the financial impact.
This article explores five of the most common and costly types of resident-caused property damage—and introduces a proactive solution designed to reduce your risk and protect your NOI.
1. Smoke Damage
Whether caused by cooking accidents, unauthorized smoking, or electrical malfunctions, smoke damage can be expensive and disruptive to unit turnover timelines.
Common costs include:
- Remediation and odor removal
- Repainting and surface treatment
- Upholstery and carpet replacement
2. Sewer Backup
Improper disposal by residents, aging infrastructure, or unexpected system failures can result in costly sewer backups. The cleanup is not only expensive—it may require professional biohazard services and result in extended vacancy periods.
3. Fire
Even small fires can result in thousands in structural damage, as well as potential loss of adjacent units. Common causes include unattended cooking, candles, overloaded circuits, or misuse of appliances.
4. Explosion
Gas-related incidents, faulty appliances, or misuse of pressurized containers can lead to explosions within units. These are rare, but when they happen, the physical and financial consequences can be significant.
5. Water Damage
Overflowing tubs, broken pipes, and poorly installed appliances can lead to extensive water damage. Water can impact multiple floors, encourage mold growth, and displace residents during repairs—all of which negatively impact NOI.
The Problem for Property Owners
Security deposits are rarely enough to cover extensive damage. Traditional property insurance policies often come with high deductibles and don’t address every type of resident-caused issue. Collecting directly from residents is unreliable and often unenforceable without the right lease language.
A Purpose-Built Resident Liability Program for Multifamily Properties
To help mitigate risk and support NOI preservation, our The Waiver from RLL offers multifamily owners a streamlined, effective solution to recover costs from common resident-caused damages.
Key Features:
- Covers five major perils: smoke, sewer backup, fire, explosion, and water damage
- Resident-funded: costs are built into lease agreements, providing full coverage without affecting operating budgets
- Lease-compliant: includes support materials and legal language to enforce protection measures from day one
- No owner out-of-pocket costs: claims are processed and paid without relying on traditional insurance or security deposits
This program is designed to help property owners proactively manage risk, reduce financial exposure, and enhance long-term portfolio performance.
Protect Your Property and Your Profit
If you’re looking to reduce liability, protect your units, and preserve NOI, implementing the Waiver from RLL is one of the most effective operational strategies available.
Ready to protect your property and your profits?
Start a conversation today with the RLL team to see how The Waiver from RLL can work for your portfolio.
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