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Renting to Family Members

7 Aug 13

Some landlords like to lease their properties to family members or close friends who they know and trust. For them, it can seem like a win-win situation. Their property is tenanted and they’re helping out a loved one.

If you have any properties in your portfolio where the landlord and tenants know each other well, there are a few points you may need to consider in order to manage it effectively.

The good news is that your involvement managing the property is an indication that the landlord recognises the importance of ensuring their property is a profitable asset - regardless of who their tenant is.

  • Insist on being the sole point of contact

When landlords know their tenants, it can be tempting for them to interfere in the management of the property, discuss issues directly with the tenants and advise property managers how to act. This can leave you at risk of missing or failing to adhere to industry protocol.

From the very beginning of the tenancy agreement, make sure the landlord and tenant both know that you are to be the sole point of contact for all issues relating to the property or tenancy.

This will enable you to deal with issues efficiently and according to correct industry procedures.

  • Issue the correct notices within the specified timeframes

Your landlord may ask you to turn a blind eye if the tenant defaults on their rental payments or promises to pay as soon as they can. However, it is a good idea to advise against this and continue to issue the tenant with the relevant notices within the specified timeframes in your state or territory.

If the landlord is later required to make an insurance claim for loss of rent, the claim may be reduced if there was a delay in sending the appropriate notices.

  • Conduct regular property inspections

Property inspections are essential before the tenant moves in and every three to four months while the tenant is occupying the property to ensure it is being kept in good condition and to alert the landlord of any maintenance issues that may need attention.

Your landlord may advise you that it's not necessary to 'check up' on the tenant and conduct regular property inspections.

However, if a tenant is injured at the property as a result of required maintenance, it could potentially lead to a costly legal liability claim for the landlord.

Detailed and up-to-date condition reports may also be requested by tribunals and insurance companies if you have an issue with the tenants relating to property damage - accidental or otherwise.

  • Recommend appropriate landlord insurance

As landlords renting to family members may not consider insurance cover, it's important to inform them of what options are available.

Landlord insurance is designed to help protect investors from many of the risks associated with owning a rental property.

Even the most fastidious and trustworthy family member is able to damage a property as a tenant, whether accidental or otherwise.

For further information, visit or call 1800 804 016.

Media contact: Corporate Conversation, 08 8224 3535

Editor’s note

About Terri Scheer Insurance

Terri Scheer Insurance Pty Ltd ABN 76 070 874 798 (Terri Scheer) provides insurance cover for landlords, helping to protect them against the risks associated with owning a rental property. These include malicious damage by tenants, accidental damage, landlord’s legal liability and loss of rental income. Terri Scheer acts on behalf of AAI Limited ABN 48 005 297 807 AFSL 230859 trading as ‘Vero Insurance’, the insurer which issues the insurance cover. Terri Scheer has not taken into account the reader’s objectives, financial situation or needs. If you are interested in any of Terri Scheer’s insurance products, the relevant Product Disclosure Statement should be considered first. It can be viewed online at or obtained by calling 1800 804 016. Based in Adelaide, Terri Scheer services all states, territories and capital cities.


The information contained in this article is intended to be of a general nature only. Terri Scheer does not accept any legal responsibility for any loss incurred as a result of reliance upon it.

Insurance issued by Vero Insurance. Read the Product Disclosure Statement before buying this insurance and consider whether it is right for you. Contact Terri Scheer on 1800 804 016 or visit our website at  for a copy