Thinking about your tenants

March 20, 2012

Landlords Insurance

Two stories* from early in the year indicate the ups and downs of the current landlord property marketplace.

The first relates to a survey which indicates that demand for rental accommodation is being driven up by approximately 8% due to migrant workers.

Although the situation is variable, depending upon which area of the UK you are discussing, the overall position appears to be that demand for rental properties continues to increase.

There may be many causes of that – of which migrant workers are only one – and other factors may include things such as people’s ongoing reluctance to commit to purchasing property against a backdrop of economic uncertainty.

The other tenant related piece of news is that a very large percentage of landlords have reported rent arrears and specific issues with certain categories of tenants.

Rising demand and rising rent levels are arguably likely to lead to greater rent arrears and associated issues and this may have some implications for things such as landlords contents insurance cover, as well as buildings cover.

Just as some landlords perform analyses of their tenants by category, some insurance providers may likewise.  This may lead to some of them concluding that certain categories of tenants may be higher risk than others and as a result, either excluding them from cover or making them subject to special terms and conditions (possibly including you needing to pay a higher premium for them).

Whatever your views of the rights and wrongs of this, it is a reality of some forms of landlords insurance and therefore something you may need to look out for carefully when you are selecting a policy.

For example, some policies may not offer automatic cover for DSS tenants, students or immigrants/migrant workers – it may be necessary to look carefully at such policies in order to understand how they may differentiate between certain of these groups.

If you wish to let your property to anyone you wish to, it might be advisable to seek cover that extends to any tenants, irrespective of how they may be categorised.

Given some of the issues relating to tenant troubles and rent arrears mentioned above, it might also be advisable to carefully consider the extent to which a policy may or may not offer you legal expenses assistance, should you end up in a legal dispute with your tenants.

Such cover typically may not include help in pursuing tenants who have fled leaving large rent arrears but it may be able to offer assistance in other domains.

Regrettably, there will always be some potential for issues to arise between landlords and their tenants.  Being as prepared for this as possible may be advisable.





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