Yes, it’s a good idea for landlords to consider taking out a rent guarantee policy, especially in light of the upcoming Renters’ Reform Bill. Here’s why:
1. Increased Financial Security
- The Renters’ Reform Bill introduces measures such as the abolition of Section 21 “no-fault” evictions. While this aims to provide tenants with greater security, it could make it more challenging for landlords to regain possession of their property, especially in cases of non-payment of rent.
- A rent guarantee policy ensures that landlords still receive rental income if a tenant defaults, providing peace of mind and financial stability.
2. Legal Costs and Support
- Disputes and eviction processes could become more complex under the new regulations, potentially increasing the time and cost of resolving issues.
- Most rent guarantee policies include legal expenses coverage, which can be invaluable if legal action is required to recover arrears or regain possession.
3. Market Uncertainty
- The reform bill may lead to a period of adjustment in the rental market. Tenants might face financial pressures due to rising costs of living, which could increase the risk of arrears.
- A rent guarantee policy acts as a safety net, mitigating potential income disruptions.
4. Professional Reputation
- Offering professional assurances like rent guarantee policies helps landlords maintain a positive relationship with their tenants by focusing on providing a secure and supportive rental environment, without undue financial pressures impacting decisions.
Considerations for Landlords:
- Policy Coverage: Ensure the policy covers all potential scenarios, including legal support, eviction processes, and unpaid rent.
- Screening Tenants: Policies often require thorough tenant referencing. Landlords should follow robust vetting procedures to meet the policy conditions.
In summary, the Renters’ Reform Bill adds complexities to the landlord-tenant relationship. A rent guarantee policy can provide landlords with financial protection, reduce stress, and ensure compliance with evolving legal frameworks. It’s a proactive way to safeguard against uncertainties in the rental market.
We can Help
If you opt in to the rent protection service we offer you, we can be there for you when you need us most, in the unfortunate event of rent arrears. When tenants don’t pay, you are protected, not only from rent arrears but also from any tenancy breach which gives grounds for possession – terms and conditions apply.
Scoffield Stone will purchase a Rent Guarantee policy from Let Alliance as even the best of tenants can fall on hard times. Here at Scoffield Stone we know the importance of protecting your rental investment and whilst it’s natural to be sympathetic, your rental income still needs to be paid.
What benefit do you get from choosing the rent protection service we provide? **
- Cover the total monthly rent, no matter how many tenants are on the Tenancy Agreement – upper limits do apply.
- Missed rental payments until vacant possession of the property or for up to 15 months, whichever comes first, up to a maximum of £50,000.
- Up to three months’ rental payments at 75% following vacant possession (where applicable).
- Professional costs up to £100,000 to cover eviction costs of the tenant for certain breaches of their tenancy agreement.
- Covers breaches of the tenancy agreement by the tenant, including non-payment of rent and other scenarios.
- We could also continue to assist if the tenant defends the action taken, to help find the best solution.
- Rent Guarantee covers the whole property meaning the policy continues even when/if the tenants change (subject to satisfactory references).
- 12 months policy term.
- Payments continue beyond the end of our policy term.
**Subject to policy terms and conditions.
Your interest will be noted in our policy and we will write to you to confirm your interest in a policy once we have arranged it.
If this sounds like something that would benefit you, please don’t hesitate to get in touch. We’d be happy to provide more details and discuss how this policy can work for your specific needs.
