landlord building insurance
Protecting Deposits – The Penalty
The Housing Act 2004 made it a legal requirement for landlords to protect their tenants’ deposits by placing them into an authorized protection scheme within 14 days. Once that has been done the landlord needs to give all the relevant details to the tenant. This is just a number of things you should supply to your tenant, such as emergency numbers, stop cock locations and landlord insurance amongst other things.
If the landlord fails to protect the deposit the tenant may be in line for a penalty award of three times the deposit. Suppose the landlord innocently fails to protect it, perhaps because of an administrative error by a third party? Does the penalty become payable?
The Court of Appeal recently decided that in such a case the penalty would not be payable as long as the deposit had been protected before the Court hearing. However it would be very unwise to make a habit of relying on this as a reason to delay protecting deposits. Apart from anything else you could be liable for substantial legal costs. It is quite easy to use one of the deposit schemes so make sure you stick to the 14 day time limit.
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Unoccupied property – don’t get sued if it snows
Like all property, an unoccupied house can be a source of legal action if a visitor is injured. Just because the building is empty does not mean that the postman and other visitors will not walk up the path. Every winter there are stories of injuries on icy and dangerous paths- what should the owners of unoccupied buildings do to protect themselves?
The government has published a Snow Code to help householders cope with heavy snowfall and it contains advice on how to clear your paths safely. People have been worried that if they clear up the snow and end up making a path more slippery you will be liable to anyone injured. The code aims to encourage people to take a commonsense approach and reassures people that they are unlikely to be sued if they are doing their best.
Owners of unoccupied property may live miles away and find it difficult to look after it with the care of an owner-occupier. It does make sense to have someone keeping an eye on it to report any problems; especially if visitors such as potential tenants or purchasers are expected. Your unoccupied property insurance policy will probably contain conditions about how the unoccupied property should be looked after- make sure you know what you have to do to keep the policy valid.
The Snow Code is at www.direct.gov.uk
New Universal Credit – Concerns For Landlords
The government is committed to replacing the complex system of benefits with one single payment – The Universal Credit. The housing element of the Universal Credit will be paid to tenants to cover their accommodation costs. The Residential Landlords Association is campaigning to have this element paid directly to landlords rather then to the tenants. The problem is that sometimes the tenant uses it to cover other outgoings or debts and does not pass it on, leaving the landlord out of pocket and possibly unable to pay their bills such as landlord insurance.
According to the RLA many potential landlords are deterred from entering this sector of the market because of worries abut the security of rent payments and other costs such as landlord insurance. If potential landlords had a guarantee that their rents would come through regularly they would be far happier about it. Housing Associations are already in this position because they receive their income direct rather than from the tenant.
What are your thoughts on landlords receiving rent directly rather than via the tenant? If landlords received money direct would it lead them to provide a improved standard of accommodation as the rent is guaranteed or would taking the property choice away from tenants decrease competition and therefore the state of some property rented to benefit tenants?
Gaining Posessions – About to Get Harder?
Many landlords are frustrated by the problems they can face if tenants breach their agreements and have to be removed. The process that must be followed is complex and must be strictly adhered to. Landlords have commented that most suppliers do not have to keep providing a service if the customer stops paying but landlords sometimes have to put up with tenants who “work the system” and stay in occupation for as long as possible, rent free.
A campaign called “Rebalancing the Law” is being mounted by landlords’ organisations to push for the procedures to be simplified and speeded up. They say that if there is a clear case of tenants refusing to pay or committing anti-social behaviour they should be evicted quickly; apparently it can take several months at the moment.
Check out the campaign on www.landlordaction.co.uk
The Ministry of Justice is planning to close many County Courts. These Courts are the backbone of the legal system for landlord and tenant disputes. The Ministry of Justice website will show whether your local Court faces closure. Will this make it harder for you to gain access to justice?
If you have rented property then you should purchase landlord insurance to protect your investment. You can often purchase landlord building insurance with additional options such a legal cover which includes some protection to reclaim your property.
Landlords face £5,000 fines for poor insulation?
The government is determined to improve the energy efficiency of the housing stock and is planning to force local authorities to put pressure on landlords of let property to insulate them. Local authorities already have power to require landlords to carry out work on their properties or face fines of up to £5,000. These fines would not be covered by your landlord insurance and although landlords legal insurance can protect you for some specified legal action fines imposed on you would not be covered.
Further laws are planned so that if tenants request energy efficiency work at a let property the landlord cannot refuse without a very good reason. The government is hoping to introduce this new right for tenants by 2015.
The English House Condition Survey in 2008 found that private rented houses were among the worst performing properties in terms of energy efficiency. 68% of private rentals had no cavity wall insulation and 45% had poor loft insulation.
Landlords have responded by arguing that the private rented sector includes many older houses that are difficult to bring up to modern insulation standards. Despite this it seems that landlords will have to develop a plan to bring their properties up to scratch or risk intervention from the authorities.
Wrong locks can invalidate policy
When you fill in a proposal form for property insurance you will almost certainly be asked about the locks. It is easy to assume that your property, whether it be your own home or an unoccupied one has suitable locks on all the doors or windows. If you are insuring your own house as an owner occupier it is easy to check but this is not the case with a let or unoccupied property that might be miles away. The worst thing you can do is assume that the security precautions comply with your insurers’ requirement- there is no alternative to checking them yourself or asking someone else to do it for you. You will find variances of security required for homeowner insurance, unoccupied property insurance and landlord insurance.
Most insurers will require five lever mortice locks conforming to BS 3621 and there may be special rules about patio doors so check your policy. If you fail to comply with the standards set in your policy you may find your claim turned down. It may make sense to change the locks periodically; especially if you know that several people have been given keys but you can only account for a few of them.
Compulsory fire alarms?
A Devon MP, Adrian Sanders is hoping to change the law to make it compulsory for landlords of let property to fit fire alarms. He is promoting a private member’s bill, The Fire Safety (Protection of Tenants) Bill which is due to go the House of Commons for a second reading on 19th November. The Bill comes in the wake of a fire in a let property in Devon in which two children died and in which there was no alarm. If the Bill becomes law as drafted landlords will have to fit a mains alarms at the start of a tenancy but it will then be the tenant’s responsibility to maintain it.
Mr Sanders does not underestimate the difficulty of getting a private member’s bill through parliament but hopes that even if he fails he will be able to introduce fire alarm regulations in some other way because he is certain they will save lives and property.
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Landlord fined for changing locks
Most buy to let landlords are well aware of the need to issue the appropriate notices under the Housing Act to bring a tenancy to an end and to have landlord insurance in place. However there are still some who seem to think they can take the law into their own hands. A landlord of let property in Blackburn has been fined £800 with costs of £500 after changing the locks when the tenant was out. The landlord also had to pay a “victim surcharge” of 15.
The Protection from Eviction Act 1977 makes it a criminal offence to “unlawfully deprive” the tenant of his occupation. Changing the locks is an example of this and others would include removing the tenants’ personal possessions, physically ejecting them or preventing them from using part of the property such as the bathroom.
Taking on the role of buy to let landlord can be rewarding but it involves legal responsibilities. There is plenty of advice on the internet and if in doubt consult specialist lawyers. As always, make sure your landlords’ insurance is up to date and gives you all the protection you need.
If you require insurance for landlords contact click4quote.com to get a great deal on your landlord insurance.
Potential landlords watching monthly price reports
Buy to let investors have mixed feelings about the monthly house price data published by the major lenders. A would be landlord sitting on a pile of cash will be keen to see an oversupply of houses on the market, especially if he or she thinks rents are holding up. On the other hand a landlord who bought at the wrong time, is in negative equity with rentals barely covering the mortgage payments will be keeping fingers crossed for price rises.
The February figures were weak-Nationwide and Halifax both say prices fell slightly. There are more homes on the market and not enough buyers and the forecasters are being very cautious. The ITEM Club, run by Ernst and Young says that prices will drop 1.4pc this year but should recover a little next year. The National Institute for Economic and Social Research reckons prices will fall 1pc in 2010 but should rise by just over 3pc next year. This contrasts sharply with the 6pc rise in prices we saw in 2009.
Halifax sums it up by saying that last year we had a combination of low interest rates, a supply of cash rich buyers and relatively few properties on the market. Most of the published data relate to the market as a whole. Property investors, whether they are accidental landlords or professionals really need figures that focus on the buy to let sector. Does anyone have any good sources of information to recommend?
If you are thinking of becoming a landlord you should always factor in landlord insurance to protect your investment. Landlord building insurance can protect against major ricks such as fire and flood. Prices for insurance can vary depending on your tenant type and landlord insurance from click4quote can handle almost any type of tenant you place in your property. Get a quote today online or by phone.
New builds not popular with buy to let landlords
A letting agent in London has produced figures showing that buy to let landlords far prefer older property to new build apartments. Ludlowthompson.com report that only 12% of landlords planning to buy additional property in the next six months intend to buy newly built homes. In March the figure was 26%.
This is further evidence of the over-supply of flats and the difficulties being faced by developers trying to sell them. In the boom, builders rushed to develop blocks of flats but as the market turned down it became clear that there far too many of them around. Stephen Ludlow said “New build flats are often built in huge blocks with other identical units. They are almost a commodity. New apartments can lose their premium over second – hand property within a couple of years”.
However, buy to let landlords seem reasonably confident about the market because 73% of buy to let investors in the survey expect prices to rise over the next six months and 89% expect rents to rise or stay the same. 24% of landlords expect voids to decrease over the next six months. The survey was reported by Ludlowthompson on the 11th November 2009.
Have you seen bargain basement prices for new build flats in your area?
If you are thinking of becoming a landlord or already own buy to let properties remember to protect your assets with buy to let insurance. You may get instant quotes online for landlords buildings insurance with click4quote.com, ideal for new or existing landlords.