Insurance -Tips for Landlords when letting out a rental property
FOR LANDLORDS (also see our Advice
for Landlords for much more detailed information)
If your property is clean, tidy and has a reasonable standard
of decoration it will be more attractive to good quality tenants and easier to
achieve a good level of rent. Think carefully about whether you would want to
live there or not. See
Our Guide on how to present a property for rental for advice to make the
property more appealing.
FURNISH OR NOT TO FURNISH?
Property can be let fully furnished,
part furnished or unfurnished. Which of these is appropriate will depend on the
type of property and the local market conditions. As a minimum you will need to
provide decent quality
carpets, curtains and light fittings. Remember, you need to accept that there
will be wear and tear on the property and any items provided. Do not leave items
which are irreplaceable or have personal sentimental value.
I NEED TO TELL ANYONE THAT I AM LETTING THE PROPERTY?
If you have
a mortgage bond or loan on the property you must inform your lender in advance
of any letting and, in some cases, get their consent. If you do not do this you
may breach your mortgage bond conditions with potentially serious consequences.
If your property is sectional title you may need the consent of the trustees of
the body corporate. Keep copies of any such consent's obtained safe, as you may
need to provide them later.
You must inform your insurance company of any proposed letting as your cover and
or premiums may be affected. Failure to tell your insurers might mean they refuse
to pay any subsequent claim. You will need to ensure that your policy covers you
for third party/ public liability so that you are covered for claims against you
following accidents etc due to defects at your property. You might want to consider
one of the various specialist insurance products for landlords, which could include
protection against rent arrears, or for legal expenses if you have to take legal
action against your tenant.CLICK
HERE FOR MORE DETAILS
Make sure you are covered if this happens?
A suitably detailed Inventory or Schedule of Condition for the property its
contents is absolutely essential. The inventory should be provided to the ingoing
tenants on the commencement date of their tenancy. Ideally the tenants should
check, sign and return a copy of the Inventory to confirm their agreement with
it. Without a good inventory a landlord is, legally, in a very vulnerable position
if he subsequently tries to deduct money from a tenants deposit for alleged damages.
Don't forget, when changing tenants you will need to provide an updated inventory
to the new set of tenants. See
It's good practice to leave a folder of information at the property for tenants.
This might include: details of rubbish collection days, nearest schools,
shops.Photocopies of any manuals/ instructions for appliances, location of fuse
boxes/ meters/ stopcock- useful and emergency contact numbers (plumber, handyman,
As a landlord you have a legal obligation to provide a safe property for the tenants
to live in. Specifically, this means that any electrical equipment provided, plugs,
sockets etc must be safe. You should also ensure that all equipment is serviced
regularly and provide instructions or user manuals so tenants know how to safely
operate appliances and equipment.
MAINTENANCE AND REPAIRS
As the owner and landlord you will generally be responsible for maintaining and
or repairing the fabric or structure of the property. Your agent will be able
to explain your specific legal obligations in more detail.
DO I RECEIVE MY RENTAL INCOME?
You will need to agree with your letting agent the anticipated timescale for the
rent to be paid on to you after the tenant has paid it to the agent. There are
a number of factors that influence this and you should discuss these with your
agent so there is an understanding on both sides. Make sure your agent is a member
of a reputable organisation such as ARLA who have a mandatory and
comprehensive client money protection (Bonding) scheme for its member firms; requiring
them to adhere to specific rules relating to dealing with clients money and submit
to audits by external accountants.
the rent is paid directly to you by your tenants, it is advisable to check your
bank statement a few days after the rent should be paid. e.g. Rental due
on the 15th of month should be in your bank account by 18th or 19th (depending
on weekends and bank holidays) If your tenants happen to bank with the same bank
as you do, it might even reach your bank the same day. Don't wait for your
monthly statement - only to find that the rent has not been paid. You will
have lost a couple of valuable weeks to "chase" your tenants. Quite
often your tenants can rectify the problem quickly and on line banking can help.
KEEPING FOR PROPERTY OWNERS
a Landlord you are required to maintain complete records of all expenses incurred
and the income received from your properties.(see Landlords
Letting Advice ) This means that you must hang onto every relevent
receipt and keeping details of any personal assets you used for the property business.
An example of this would be to note down the details of all journeys you make
concerning your property's business, the portion of your home used tp process
related paperwork and time spent on your computer carry out work for the property.
should retain all bank statements and all records have to be retained for five
years after the tax return filing date. Any receipts regarding property improvements
should be kept for six years after the end of the tax year in which the property
is sold. If you don't keep tax related records you could face a UK fine of £3,000.
From April 2007 under the 2004 Housing Act
Landlords will no longer be able to hold deposits with AST tenancies unless they
have them registered with a specific scheme. See
Tenancy Deposit Scheme
This information should not be relied on for accuracy and is presented here without
the responsibility of jml Property Service and the website it is being displayed
at. ©jml property Services 12-04
Insurance - Think jml
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time you thought about insurance for your rental property?
to letting or renting?
a look at our landlords
advice and tenants
do I need Landlords Insurance?
Insurance Article by Philip Suter
with Accepting Housing Benefit in England and Wales Article by Philip Suter
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