Broker Training – Landlords Legal Expenses
Landlords Legal Sales Process
The Lexelle Landlords Legal Expenses policy safeguards Landlords from potential issues that may arise from letting out their property and the effect this can have on future expected rental income and finances.
It is important to run though the following product features, covers, pre-requisite terms and key areas that are not covered by the policy as a minimum set of declarations prior to sale of the Lexelle policy.
Landlords Legal Summary of Key Covers
The policy provides a free 24/7 legal advice service for all policyholders. This service is available for all legal issues falling under the jurisdiction of the courts of England, Wales, Scotland & Northern Ireland.
- Repossession of your property – cover for legal costs for legal process of eviction of a tenant who has breached the terms of the Tenancy Agreement.
- Also covers eviction of anyone residing in your property that has not got your permission to be there (e.g. squatters).
- Legal costs to recover any rent that may be owed to you.
Defence of your legal rights if an incident from letting your property results in you being prosecuted in a criminal court.
Where you have no alternative accommodation available, hotel accommodation up to £50 per day whilst we are trying to gain possession of your property.
Some Important Point of Sale Pre-Requisite Checks
- There must be a formal signed tenancy agreement in place (e.g. Assured Shorthold Tenancy Agreement).
- You must also comply with the statutory regulations relating to deposits before a tenant vacates the tenanted property.
Prior to granting tenancy, you must obtain:-
- a tenant credit history check that demonstrates that the tenant can afford the rent terms, show no recent bankruptcies and be clear of CCJ’s last 3 years.
- a satisfactory reference from a previous landlord or employer.
- copies of 2 forms of id one with photograph.
- a recent utility bill or bank statement.
- where there is a guarantor the same referencing conditions will apply.
Landlords Policy Conditions and General Exclusions
- For a legal process of eviction claim you must first serve the tenant the correct notices informing them that you want possession of your property – if you have any doubts contact the Claims Helpline to discuss.
- You must keep up to date records including a detailed inventory of the contents and condition of the property signed by the tenant.
- The Insurer does not accept any liability for any legal costs and expenses incurred without their prior consent.
- There are specific instructions for dealing with a claim in particular when a solicitor is appointed. These are fully detailed in the main policy terms.
- You must contact the Claims Helpline immediately of any events that could give rise to a claim as failure to do so could result in the claim being declined.
- You must conduct regular inspections of the property – at least every 6 months.
- The 24/7 Free Legal Advice Helpline will provide general advice only and cannot assist with complex legal matters which may require the review of documentation or specific legislation.
- Using the helpline, does not constitute notification of a claim which must not be delayed whilst using the free legal advice helpline. You must not rely on the free legal advice helpline instead of reporting a claim.
- Any property which is or should have been registered as a House Of Multiple Occupation (HMO).
- Any dispute between you and a Managing Agent.
- Any incident that occurs within the first 90 days of the start date of the policy or outside the period of insurance.
- Any contractual agreement other than a formal tenancy agreement.
- Any legal costs relating to rent tribunals, reviews or land tribunals or service charges.
Full details of policy exclusions are detailed under the WHAT IS NOT COVERED section of the main policy terms and conditions.
In brief the policy provides cover in the event that your tenant is in breach of your tenancy agreement. This includes legal costs for the legal process of eviction, recovery of lost rent or damages sustained to your property.
There is no legal requirement for the product but it will offer you valuable protection against potentially lengthy legal disputes should your tenant breach the terms of your tenancy agreement.
The Rent Guarantee policy option is more expensive than the Landlords Legal policy, both policies seem to cover legal support for recovery of any rent arrears so I am not sure which to purchase?
The standard Landlords Legal policy covers for legal pursuit of lost rent, however this is not guaranteed to be recovered as not all rent recovery pursuit claims will have reasonable prospects of success. However, with the Landlords Legal and Rent Guarantee policy you can claim back unpaid monthly rent until the legal process of eviction is complete for a maximum of 6 or 12 monthly rent payments.(The policy has two options up to £2,500pm or up to £5,000 pm).
Yes – as long as they use a licensed credit referencing company for all tenant references e.g. Equifax, Experian.
It is the landlords responsibility to ensure the credit referencing, employers and previous landlords references are good and meet the policy requirements.
A potential tenant is currently an overseas resident that is moving to the UK to take up a Senior Executive position. His stated income is well in excess of income requirements for the stated rent, but cannot meet all necessary credit reference terms of the policy. Based upon his income would the tenant meet the terms of the policy?
As a tenant cannot satisfy the policy terms detailed in the tenant reference definition then, although the tenant meets affordability requirements, the policy would not be suitable. However, an alternative option would be for his UK employer to act as guarantor and be named on the formal tenancy agreement.
A Landlord has 2 properties rented within same building. A small shop and a rented flat above the shop. Would one Landlords Legal policy cover both rented properties?
Firstly, the Landlords Legal policy is for properties rented for residential purposes only so the rented shop being a commercial rent cannot be included under cover. The rented flat above the shop can be covered as long as there is a valid tenancy agreement in place for that property (not included in the shop tenancy).
No, the policy does not cover Houses of Multiple Occupants.
For this policy to be valid, the Landlord (or their agents) must meet the policy’s Tenant Referencing requirements prior to the start of the tenancy.
Prior to the beginning of the tenancy, the tenant must;
- Be able to evidence regular income that meets affordability checks without reliance on benefits (other than disability benefits)
- Not have any outstanding CCJ or satisfied CCJ’s within the last 3 years.
- Provide 2 forms of identification, including one which contains a photograph.
- Provide 2 satisfactory written references from the tenants employer and a past landlord’s reference or from another referee if either are unavailable.
- Provide a copy of a recent utility bill or bank statement.
- Provide a satisfactory credit check (within 45 days of the Tenancy Agreement and within 12 months prior to the commencement of the policy), confirming income and affordability.
If any documentation or information becomes known to the landlord suggesting their may be issues/concerns that may affect the tenants ability to meet their obligations, the policy will not act.
To make a claim, refer to the claims procedure detailed in the policy wording.
Tel:0114 350 4107.
Quote master certificate number at the heading of page 1 on the policy wording.