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Landlord Property Insurance

Landlord Property Insurance for UK Landlords – in recent years, landlord property insurance for landlord owned properties (as they have become known) has increased dramatically. In the early days, the ability to obtain this type of insurance cover was fairly difficult as most insurers considered it to be more akin to a commercial building insurance proposal and wanted it insured and rated accordingly. It was considered that as the property was rented, there was a commercial element to the risk and therefore the correct liability cover had to be applied. To meet the demands and needs of the growing rental market, insurers responded by creating bespoke policy wordings that were in the main based on a fairly typical home owners insurance wording. This was seen as a natural development, after all landlords were borrowing money from lenders on mortgages and they were being requested to confirm that cover afforded by an insurers was in accordance with the lenders handbook. It was thus appropriate that a policy wording was based on a household wording.

Landlord Legislation – whilst it may be fairly easy now to borrow money to fund a property purchase and obtain insurance to cover all the usual risks, many landlords are unaware that renting property in the United Kingdom is subject to a number of rules and regulations. In fact, there is a whole raft of legislation that needs careful consideration including; The Disability Discrimination Act, Sex Discrimination Act and Race Relations Act, all of these apply to people letting property and should be studied prior to attempting to obtaining a tenant. As well as the above and in preparation for letting, the landlord will need to make sure that he is able to comply with the following specific laws. Often if you have decided to employ the services of a letting agent, they will be able to help you make the property ready and will be able to suggest someone to carry out the necessary checks. It is unlikely that you will be able to find a letting agent that will be prepared to market your property if it does not meet the requirements of the law…

Gas Safety (installation and use) Regulations 1994 – this is probably the most well known of the laws relating to landlords but is often overlook. Penalties for non compliance are high and can include a term of imprisonment. If you effect an insurance to cover your property, it will often state that this law must be complied with for a claim to be valid under the policy wording. The Gas Safety (Installation and Use Regulations) 1998 place a duty of care on all Landlords to make sure that all gas fittings, appliances and flues etc that form and or are supplied with the landlords building are maintained in a safe condition. A copy of the gas safety certificate should be left with the Tenant at the property along with instruction books for all appliances. The certificate will need to be renewed every 12 months or as directed.

Furniture and Furnishings (Fire) (Safety) (Amendment) Regulations 1993 – any furniture and furnishings provided by a Landlord for use by the tenant must meet the fire resistance requirements of the above regulations. If you are purchasing new furniture for the property that the task of compliance is made a little easier for you as any item of furniture sold since 1990 will have regulatory display labels, which should not be removed, This may seem a little unsightly but you should leave them on so as the tenant can see that the item comply with the regulations. The current regulations cover all upholstery and upholstered furniture property. Typical items that need to comply with the law include settees, armchairs, and sofa beds. The regulations do not apply to duvets, loose mattress covers and carpets. Obtaining a copy of the act will give you a more definite list of items that require attention.

The Electrical Equipment (safety) Regulations 1994 – oddly enough, there is no statutory obligation placed on Landlords to have professional checks carried out on the electrical system or appliances at the rented property, however this doesn’t relieve you of your duties as under the Electrical Equipment (Safety) Regulations 1994 & The Plugs and Sockets etc. (Safety) Regulations 1994 there is an obligation to ensure that all electrical equipment is safe for your tenants usage. Of course one of the only ways to prove compliance with this act is to have appliances tested by an electrician. One that is NICEIC approved should be able to provide you with a safety certificate and find out more about approved electricians.

The Housing Act – The Housing Act received royal assent on 15th November 1988 and part I of the new Act signalled a fresh and market-oriented approach to the legal relationship between landlord and tenant through the Assured Short hold Tenancy. These agreements form the bedrock of renting in the United Kingdom and help to set out in a clear concise manner the responsibilities of both parties. The agreement gives both parties rights, the landlord can recover the property at the end of the agreement and the tenant has the right of quiet enjoyment and can simply not be forced out of the property and the landlords whim. Agreements are usually for a minimum of 6 months but do not apply to lettings to company lets or to Holiday lets. Amongst some of the more salient points mentioned in the agreement are the Landlords responsibilities, these include:-

  • Making repairs to the structure and to the exterior of the property, keeping the heating and hot water installations in working order basins, and making sure that all sinks, baths and other sanitary installations are working. If the landlord is advised during the rental period that there any problems with these items, he must take remedial steps to have them repaired
  • As mentioned above, the as appliances must be serviced and checked and a certificate provided to the tenant
  • As mentioned above, the fire safety of furniture and furnishings provided must be checked
  • The landlord must make sure that the property is fit for habitation.

A recent change to the law has seen the introduction of the Tenancy deposit law. This law was introduced on 6th April 2007 to give more protection to tenants by preventing landlords and letting agents from unfairly withholding deposits. There are a number of schemes that are being run at the present moment and which ever one you choose is a matter of personal choice. The law was introduced to help prevent disputes at the end of a tenancy agreement and landlords simply keeping as much of the tenants deposit as possible. Landlords should be aware that if they do not follow the law and an unhappy tenant takes them to court, the law is likely to side with the tenant and the penalty could be fairly onerous.

Landlord Property Insurance for UK Landlords- Contact Assetsure for a quotation.

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