Landlords Legal Expenses & Rent Guarantee Insurance

Do I need landlords legal expenses?

Being a landlord carries certain risks when letting your property to tenants. The legal expenses provides cover for circumstances that may arise requiring appropriate action and resolution, be it eviction, legal defence, a breach of the tenancy agreement or property infringements.

What am I covered for?

Typically up to £100,000 for landlords legal expenses under the following heads of cover, but cover does vary from insurer to insurer so do please check your policy wording:

  • Breach of Tenancy Agreement
  • Pursuit of Rent Arrears
  • Eviction of anyone in the property without your permission
  • Legal defence for any civil or criminal proceedings which are brought against you arising out or your management of the property
  • Tax, VAT, PAYE and NIC Investigations
  • Employment Disputes
  • Property Protection
  • Contract Disputes

What am I not covered for?

  • Any event which occurred prior to your purchasing insurance
  • Claims where the amount in dispute is less than £250
  • Claims where your prospects of success are not sufficient
  • Professional fees relating to your alleged dishonesty, deliberate or wilful acts and omissions.

Can I use my own solicitor?

Yes you are able to use you own solicitor provided that the insurers prior consent is given to do so and that your solicitor agrees to the insurers terms of engagement.

Rent Guarantee

Do I need rent guarantee?

Rent guarantee provides cover in the circumstance that your tenant defaults on rent. The cover will allow you to make a claim and provide you with rent (up to the insurers specified limit) or until vacant possession has been gained. Rent Guarantee cover is provided as an extension to a Landlords Legal Expenses insurance policy and cannot be purchased in isolation.

What am I not covered for?

  • Claims where there is less than 1 month’s full rent in arrears
  • Where the amount in dispute is less than £250
  • Where vacant possession of the property has been gained
  • In respect of any event which occurred prior to your purchasing insurance
  • Legal proceedings outside the United Kingdom
  • Claims where your prospects of success are not sufficient
  • Where an existing tenant has defaulted on rent.

What references are required?

Different insurers have different requirements but typically, a credit check against the tenant and any guarantor obtained from a licenced credit referencing company showing:

  1. No County Court Judgements in the past 3 years
  2. No outstanding County Court Judgements in the past 3 years
  3. The tenant’s or guarantor’s financial ability to meet the rent commitment
  4. That is appropriate in the circumstance following receipt of the outcome of the credit check to grant a tenancy agreement to the tenant.

When buying a Rent Guarantee policy please check that you have obtained the necessary references as insurers will not pay a claim if the tenant does default on the rent.