Tyler: Hello everyone. This is Tyler Ford EXP Realty here, Tucson, Arizona. And I’m back with Heather Chandler Rich. She’s our account rep for 2-10 Home Warranty here in Tucson, Arizona. She does a great job, very helpful-

Heather: Thank you.

Tyler: In helping provide value for our clients in home warranties. And today we’re going to be talking about a subject matter that’s been coming up more and more in a lot because Arizona Tucson, it’s a big Airbnb community where people buy rentals and they turn them into shorter term rentals, Airbnb. And I’m kind of guilty of that because I’m an investor, but a lot of times we’ve bought a property that we think is going to be a long-term invest or a long-term rental type of property, but we’ve had second thoughts, maybe turning it into an Airbnb. But what we here is sometimes somebody might buy a property getting a home warranty, but if they turn it into and I’ll let Heather kind of turn it over from here, if they turn it over into a business, a shorter term business, that home warranty would not cover. So with that, I’ll turn it over to you, and let’s just talk about like under 2-10, what would they not cover in terms of residential property that wouldn’t be covered under eight to 10 homes?

Heather: Sure. Thank you. Thanks for this opportunity. So with 2-10 home buyer’s warranty, we have this one year renewable home service agreement, and the idea is to protect the systems and appliances. And we want our client to be a established long-term resident. So in the terms and conditions, which is that page that says who, what, when, where, or how, that is where it says, what is covered. And we refer to the residential systems and appliances as the items to be covered.

Heather: It says specifically that “We will not provide service in a commercial property or residents being used for business purposes, such as short-term rentals, which would be Airbnbs type thing, bed and breakfast, care centers, group homes, fraternity sorority houses, hair salons, schools, to just name a few. And because there’s a lot of quick turnaround usage, maybe people not taking as much care taking ownership of the property as much. So it’s a industry standard for home warranty companies to not cover short term rentals or anything that’s used as commercial space or anything for a business. So it is a bummer because most people don’t always read the terms and conditions to know that, they might be surprised later. So if you happen to have a home warranty on a property that you’ve turned into a business, might be a good idea to just cancel, get your money back so that you don’t have any unexpected surprises.

Tyler: So that’s my next question. So let’s say somebody buys… It’s an investor that buys a single family home. They have every intention to do a long-term rental. They decided to turn it into an Airbnb. Can they get a proration and a refund?

Heather: Absolutely. Yep. There… Home service agreements can be canceled at any time. There could be a cancellation charge, but absolutely they will get their prorated dollar amount back to that was not used. And that’s actually happens quite a bit within our-

Tyler: That’s good.

Heather: In the industry when this happens, when the homeowner realizes what exactly, that, oops, I have this home service agreement and it’s not eligible for coverage at that time because of it’s being used as a short term.

Tyler: That’s good to know too. Let’s say you’re on the… You’re the buyer’s agent representing the buyer. And the seller is willing to provide a home warranty, knowing that it’s going to be an Airbnb, you might be able to negotiate something different in trade versus the home warranty.

Heather: Yes.

Tyler: So it’s good to kind of know up front. And as an agent, you might want to ask if your client, if they’re an investor buying something, they don’t always tell you whether or not it’s going to be an Airbnb. So as an agent, it’s a good question to ask.

Heather: Absolutely. Yeah.

Tyler: So I think that’s it. This one’s short and sweet.

Heather: Thank you. Yeah. Yeah. It’s great information. We need to know it because our market’s rocking.

Tyler: Exactly. And I did not know that. So I just assumed any residential type property that had a home warranty, it was covered. So thanks for bringing it up and thanks for sharing. Appreciate it.