Rent Guarantee and Legal Expenses Insurance policy for Landlords

A prospective tenant could suggest paying for a rent guarantee and legal expenses insurance policy. Landlord Rent Guarantee Insurance covers any rental loss or damages inflicted by the tenant. It’s an insurance policy for Landlords that covers rent losses if tenants fall in arrears. If the tenant runs up any legal costs (e.g eviction costs), then the insurance company will cover costs.

Note: “Landlord Rent Guarantee Insurance” is different from “Landlord Building Insurance”.

If a tenant is in love with a particular property, and is willing to lick gum off the landlords shoe to secure the tenancy, then they could always combine the two methods; double the security deposit and pay for the insurance. While this particular method may significantly increase the initial costs of becoming a tenant, they should remember that they have the opportunity to regain the security deposit at the end of the tenancy (as long as they behave well), so the only real cost will be the insurance.

Why need a Rent guarantor?

A rental agreement is often made between the landlord and the tenant or tenants. But in some cases, a guarantor acts as third party to help provide security for the landlord in terms of the rental agreement.

A rental guarantor has entered into an agreement, this means that in the event of a tenant being unable to meet their obligations under the tenancy agreement, whether it is for overdue rent, damage to the property or something, the Guarantor is legally bound to accept the liabilities on behalf of the tenant.

What is guarantor agreement?

  • If the tenant defaults in the payment of rent laid down as per the tenancy agreement, the guarantor will pay the landlord.
  • If the tenant does not observe her/his obligations as set out in the agreement, the guarantor will pay all losses, damages, expenses and costs that are incurred as a result of the tenant’s default.

Duration of Obligation

A rent guarantor is obligated to fulfill your rent requirements if you default through the duration of your lease.

Risks of Guarantors 

There are some risks to being a rent guarantor. If you miss payments on rent, the late payments can show up on the guarantor’s credit report, as they are legally connected to your rent agreement. If you don’t pay and the guarantor also cannot pay, the landlord or property manager has a right to file a lawsuit against both you and the landlord to collect rent and associated fees. Any judgments issued by the court also may show up on the guarantor’s credit.

Rent Guarantee Insurance to Claim Back Your Rent!

Have you rented out your house? Are you not living in that house any more, is your property being let out? Don’t you think you need to insure your property or house that is rented out in order to allay any damages caused to your building and to recover the cost of damage? Whether your house has been inherited from your ancestors or you have shifted to another location, you need to ensure that your renters pay you money on time.

Rent damage can be caused by several reasons:

Your rent can be assured in the following circumstances

When there’s a damage caused to your property due to natural calamity

When the building has caught up in fire

Or your tenant doesn’t pay his rent

Make sure that your tenants will repay the rent on time. Some insurance agents offer you guarantee on your rent such as £2,500 per month, instant cover, it covers you under 12 month policy, and offers 24 hour assistance. It is essential to insure your property or home in order to claim them in times of crisis. Safeguard your rent for sure! Guaranteed rents will work with your existing letting agent if that is your preference. Or it will arrange an alternative. The cost of using a letting agent is normally around 10% of the gross rent. This is covered by guaranteed rents within the rent contract. Rent Guarantee provides guaranteed protection against tenant default, such that your lease agreements have an assured income. If you have a property which you are looking out to rent then Rent Guarantee provides guaranteed protection against tenant default, such that your lease agreements have an assured income.

A buy to let property is considered as a commercial property and there’s a separate insurance policy to claim for the rent on commercial property. Your property records must be kept up to date, have a proper agreement with your tenant and other records for tax authorities too. You may loose several pounds in rental income and legal expenses to claim for your rent. Some insurers won’t cover properties if tenants are claiming benefit, whether you are using private sector leasing or not. In case, a private sector leasing is covered, then, you can request for a higher premium.

Seek out for a right rent guarantee insurance agency online which can help you out in making your claims, which you deserve.

Kirthy Shetty, Platinum author. Insurance for Landlords’ assistance: Rental Guarantee Quote & Insurance

Tenant reference assistance or free advice: Tenant Referencing Company