Landlord Legal Expenses Insurance
Landlord legal expenses insurance can financially assist a landlord when raising legal disputes against their tenants due to multiple factors ranging from failure to pay rent to extreme property damage. Furthermore, this cover can also help to evict squatters and help to reimburse the landlord for any of the expenses associated with these tasks. It is worthwhile to opt for this insurance as a supplementary policy in your landlord insurance because it is not usually included but can help save thousands of pounds should you need legal aid.
Landlord Legal Expenses Insurance
When Might Landlord Legal Expenses Insurance Be Useful?
- Failure to Pay Rent
The most common legal disputes that landlords have are often because a tenant has failed to pay rent. Numerous reasons may be behind why this is: a tenant may have recently lost their job, they may be spending money recklessly and not leaving enough for their monthly payments, or a new expense may have come up which they do not yet know how to finance.
Either way, when this incident occurs continuously, a landlord may reach their limit of flexibility and decide to evict the tenants because of their inconsistency, ultimately breaking their tenancy agreement. Eviction is a costly process and concerns expenses associated with filing the correct paperwork, which can cost up to £300, serving an eviction notice and hiring legal aid to represent for representation. Legal expenses insurance can cover all of these costs, as long as the insurance company decides that the claim is valid and there is a clear breach of contract
2. Damage to the Property
Often when a tenancy agreement has finished, the occupants leave the property in a much worse state than when they first moved in. This could include multiple appliances installed during their tenancy, stains on the walls or carpets, holes or scratches in the walls, and any similar destruction they caused during their time on the property.
A landlord must pay for the reparation of these damages, including hiring workers to dispose of the tenant’s appliances, builders to rectify the fixtures in the property, and cleaners to get rid of any stains left. Cumulatively this all adds up, and the landlord would have to pay these costs out of their pocket if the tenant refused to repair these issues themselves. As a result, legal expenses insurance can help to hire a lawyer and take the tenants to court so that the landlord is reimbursed for these costs.
When a property is illegally inhabited by people who do not have a contract with the landlord and hence have no legal right to reside in it, they must be removed. This could be someone the landlord is unfamiliar with or even a tenant who has been evicted or no longer lives in the building.
The process is similar to tenant eviction, whereby the party who has been living in the property unlawfully is established to be in the wrong by the judge. So the landlord is given the right to expel them. Usually, these claims are easy to establish in court. So there is a high chance of the landlord winning the case if the inhabitants do not pay rent and have no contract, so insurance companies are willing to compensate the landlords for these legal costs.
4. Claims Against the Landlord
Even though most legal expenses concern a landlord filing a lawsuit against a tenant, sometimes the tenants feel that the landlords have not provided good services. For example, tenants may take their landlords to court for refusing to maintain the quality of the property. Examples include if they do not repair damaged infrastructure after being made aware of it, or there are problems with the temperature, water supply, electricity or lighting, which are not the tenant’s fault. In these circumstances, legal expenses would be required to hire a lawyer, which the insurer may reimburse the landlord for if they believe they are not liable.
It should be noted that these claims will often only be approved if there is a high likelihood of the landlord winning the court case or if the expenses are over a certain amount.
Landlord Legal Expenses Insurance – To Conclude
In conclusion, legal expenses insurance for landlords can protect a landlord financially from any costs they may incur when taking their tenants to court, or vice versa. Most insurance companies can cover landlords for up to £100,000, whilst the annual premiums can be as low as £40, magnifying how much money can be saved when obtaining this cover as an addition to your landlord insurance.
Find out more about the importance of insurance here.
Other useful links about Business Insurance:
Building Insurance for Landlords
Landlord Contents Insurance
UK General Landlord Insurance
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