• Katie

Can You Survive Without 6 Months + Of Rent?

Last week I saw a post about tenants who had abandoned a property and left a car on the drive which the local council wouldn’t help the letting agent to remove due to the car being on private land. This reminded me of a case I’ve previously had dealings with where tenants stopped paying rent fairly quickly after moving into a substantially large house, the rent being around £1500 per calendar month, so as you can imagine the rent arrears on a property of this price mounts up pretty quickly.

After several months of no rent and the landlords patience starting to wear thin of broken promises of rent they had no option but to instruct a solicitor to serve a section 8, 10 & 11 upon the tenants to gain possession of the property, which are for rent arrears and persistent rent arrears and late payments. This was the landlords only option to gain possession, the Tenancy Agreement was a fixed 12 months term.

The short version of this story is the landlords were awarded possession of the property via a court hearing and a date was set for the tenants to vacate. The date came and the tenants had vacated but the downside was the state the property was left in. There were possessions left meaning notices had to be served to try to locate the tenants to give them the opportunity to collect their remaining possession, therefore causing further delays for the landlords to be able to put right any damage, clean the property and re-rent the property to start receiving some rent again.

The total cost of this case to the landlords in respect of repairs to any damages, fees and rent arrears mounted to over £17,000, in this case the landlords had no insurance policy meaning all fees and repairs etc had to be paid from their pocket. If they had a rent guarantee insurance policy in place the loss amount to them would have been substantially less.

The name rent guarantee can be slightly confusing; most people believe this cover can only be used when tenants fall into arrears. Depending on the insurance company and the terms, most will have a legal cover that can be purchased separately or included with the rent guarantee policy. This will cover landlords up to a set amount to enable eviction of a tenant who has breached the Tenancy Agreement as well as cover the rental payments for a set period of time. The insurance company normally have a claims team in-house or who they use to deal with the case on a landlords behalf taking most of the stress away. You will need to check individual clauses on individual insurance policies to see what is and isn’t covered.

Based on this case when I initially speak to landlords about renting out their property I always strongly advise landlords to take out or just look at the benefits of a rent guarantee and legal expenses cover to protect them for if the worst was to happen. Even with the thorough references, letting agents can never envision what the future may hold. It goes back to that old saying, “it will never happen to me” would you like to leave that to chance? I know I wouldn’t!

Why Rent & Legal Insurance Is A Must Especially With Covid Impacting Jobs

Covid is meaning more and more tenants are falling into arrears because people are being made redundant, self employed and fall through the gaps of getting help from the government or are being furloughed but that money doesn't cover all their outgoings. on 14th February 2021 the government have extended the eviction ban till 31st March 2021 leaving only those most serious cases being exempt. This won't help landlords with no light at the end of the tunnel and the possibility of another 6 weeks plus of no rent until action can be taken and even at that point there will be a big back log so where will you fall in that queue? With a rent and legal insurance cover most policies will say they cover rent for 6 months or until vacant possession has been gained.

For the additional £15/£20 a month can you see the benefits in having this insurance policy? Can you be without 6 months rent?

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