As many private landlords will be aware, there is a shortage of suitable council housing for council tenants looking for accommodation. Over the years, the situation has got worse as an increasing number of people lost their owner-occupied properties due to the recession as they were unable to maintain their mortgage repayments.
Another reason that there is a shortage of council accommodation is that many people were given the right to buy their local authority home many years ago and took up the option.
There are a number of councils in the south east of the country and in London that are offering private landlords a significant sum of money to provide homes for those people on council house waiting lists. In fact, some councils in London are offering as much as £4,000 to landlords to ‘persuade” them to help them out.
It is no secret that there are many private landlords who will not entertain taking on tenants that are on benefits and allow them to rent their properties as the perception is that some will not take as much care of the property as a private tenant who is not on benefits. Some landlords may now take a different view and consider renting out their investment properties to such people in view of the sums being offered by some local councils.
Apparently, under this arrangement, the landlord will not be able to also take a deposit from the tenant as they would normally do when renting out a property. This deposit is normally to cover such things as non-payment of rent and to cover any damage to the rented out property, fixtures and fittings or its contents that are owned by the landlord.
It will be interesting to see how many landlords participate in this scheme and also if it encourages more people to buy investment properties to then let out.
If you are a landlord you have no doubt invested a considerable amount of money in purchasing your investment property, possibly carrying out certain improvements and marketing it. Having found a tenant, you can start to reap the financial rewards of your new business venture and, if you have one, start to repay the buy to let mortgage.
There are so many things that you will have had to sort out. One of those may have been insurance on the property. Whilst you are under no legal obligation to arrange landlord insurance if you bought the property without recourse to borrowing money, if you arranged a mortgage, the lender may have made it a condition of the finance that you insure the property. In any event, surely it would be sensible to arrange such cover to protect your investment?
However, you may not have been aware but one of the risks that is often covered as standard within landlord insurance is against one of your tenants attempting to sue you due to injuring themselves whilst on the premises. This is covered by public liability insurance.
Potentially, this is an extremely valuable form of cover. Accidents to people do happen. Can you imagine if one of your tenants tripped over on a loose hall carpet and hit their head on a table in the hall and suffered brain damage meaning that they could never work again and were confined to a wheelchair/bed for the rest of their lives requiring constant nursing care. The cost of providing such care and the impact on loosing their earned income could run into a seven-figure sum over the years.
Public liability insurance is designed to cover the legal costs of the claimant and yourself and the damages that the claimant has been awarded (subject to a maximum level of cover). If you had not arranged landlord insurance that included public liability cover, where would you have found the money from to meet such a claim? Even if you were to sell the investment property, the net sale proceeds may not have been anywhere near sufficient to cover the costs relating to the sort of claim we have described above.
So, why not get in touch with us to obtain a no obligation quote for landlord insurance that also includes public liability cover.