Landlords insurance & beautiful Jersey

January 14, 2012

Landlords Insurance

A rather interesting story comes from the BBC* with regard to a change to Channel Islands law on the subject of rental properties – and one which may have an impact on landlords insurance.

Now before you start to think that as this is the Channel Islands it may automatically be inapplicable in your circumstances, it may be worth keeping in mind that this legal change has been mooted elsewhere

The news item makes reference to the fact that in future, landlords on Jersey will need to prepare and jointly agree a full property condition report as part of their rental agreement with tenants.

Some landlords will have experienced the difficulties that may arise when tenants are leaving a property and there is a perception that they have accidentally or intentionally damaged the property during the course of their stay.

This may result in at best, undignified squabbles and at worst, legal action, regarding the rental deposit held against the condition of the premises.

Of course, some landlords insurance policies may offer protection against malicious damage caused by tenants but useful as that may be, there is still sometimes scope for considerable disagreement, acrimony and expensive administration arising from disputes over the state and condition of the property to begin with.

The article makes the point that it is already commonplace for both landlord and tenants to jointly agree an inventory of the contents prior to moving in.  It is difficult to see why, as a matter of principle, the same should not apply to the condition of the property itself.

However, the devil is in the detail.

It isn’t immediately apparent how a tenant is meant to verify a statement to the effect that the plumbing is in good condition, short of hiring their own property surveyor and conducting a full structural survey.  This is not something that even the most demanding landlord is likely to consider reasonable.

Then, there is the question of proportionality.

If a tenant has been responsible for very significant damage to the property, any deposit held may be woefully inadequate in terms of covering the cost of repair and that ignores the sometimes thorny issue of proving culpability.

All things considered, while the Jersey situation seems to be noteworthy and subject to much discussion and speculation, it will be interesting to see just how this experiment pans out in reality.

In the meantime, landlords that have some experience of life may be reminding themselves just how important landlords insurance is – particularly those policies that offers some degree of cover against tenant related issues that may result in property damage.




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