1 December 2022

Legal Expenses and Rent Guarantee - what you need to know

By Kevin Meek New Business Senior Account Handler

When you let out a property, you enter into a legal agreement that binds you and your tenant by certain rules laid out in the tenancy agreement. So if those rules get breached, it can lead to legal action. This can go both ways – you, as the landlord, may need to start proceedings against a tenant for a range of reasons, or your tenant could sue you for an alleged breach too.

Legal cases are expensive, complex and time-consuming – and that’s why landlords have the option of adding Legal Expenses cover to their landlord insurance. But what does it actually cover – and is it enough to protect you?

What is landlord legal expenses insurance?

With legal expenses cover added to your landlord policy, you’re protected from the legal costs associated with your let – for example if you need to take legal action to evict a tenant or to defend yourself if a tenant files legal proceedings against you. It covers costs for issues such as:

  • Contract disputes
  • Legal action and defence
  • Recovery of debt
  • Eviction
  • Court proceeding costs.

Why do you need it?

Whenever you enter into a contract, there’s always a possibility that a dispute will arise that can only be settled legally. However diligent in your duty as a landlord, or however much you trust your tenants, there’s always a chance that an unexpected situation will require you to pay for a solicitor to act on your behalf.

Evicting tenants who’ve stopped paying the rent can take a long time and rack up a lot of costs. But it’s not just eviction cases that you should consider. You might need to take legal action if a tenant causes malicious damage to your property on purpose before they leave, or if you end up in a dispute about the tenancy agreement, or even tax.

There’s also the risk a tenant who believes you’re in breach of your duty of care as a landlord might take action against you, for example if they think you haven’t maintained your let to be fit for habitation.

What about your lost rent?

While landlord legal expenses cover offers you protection for the expensive costs of a legal process, it does not cover what you lose in rent during the dispute. So if you rely on regular rent to pay your mortgage or cover your living costs, this can be a real problem. Legal proceedings can take many months – leaving you without an income for a prolonged period of time.

Luckily, that’s where Rent Guarantee cover steps in.

What is Rent Guarantee cover?

Rent Guarantee offers excellent peace of mind for landlords who rely on rent to live. In a nutshell, Rent Guarantee covers your monthly rental income in the event your tenants fall into arrears or refuse to pay ¬– protecting your own financial position – and it includes legal expenses too, so you get the benefit of both covers under one policy.

Why do you need it?

If any of your tenants default on rent, cause deliberate damage to your property, refuse to leave following an eviction or end up in a dispute with you over renovations or repairs, you may well end up with a tenant living in your property but no rent landing in your bank account. It can take a long time from serving an eviction notice to getting access to your let again – so how will you cope without income?

Rent Guarantee insurance is your answer. When your tenants are one month behind on their payments, you can usually put in a claim and your insurer will cover your rent for a set amount of time. As a rule this is up to 11 months – giving you the reassurance of nearly a year’s worth of rental income if the situation calls for it. And because these situations generally involve legal action, Rent Guarantee cover usually includes some legal expenses cover as well.

With Rent Guarantee, you can benefit from:

  • Rent indemnity cover
  • Cover for costs of repossession
  • Cover for costs of eviction
  • Legal costs cover
  • Peace of mind your income is protected
  • Reassurance for landlords who are renting to new, unknown tenants.

Why do you need it?

At Protect My Let, we can offer Rent Guarantee insurance with legal costs up to £50,000 included. To chat through your options, just give us a call. You’ll speak to a team of real people (not robots) who know all the ins and outs of your different landlord covers – and can find the best options for your unique needs from a wide network of insurers. Head to our website or call  01206 655899 to find out more.

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Need to speak to someone about landlord insurance?

You can find further useful information, get in touch with a member of our team, or submit an enquiry on our landlord insurance page.

 

 

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