Protection against troublesome tenants

Problem tenants can be the bane of a landlord’s life.

From those who can’t, or won’t, pay the rent, to tenants who cause damage to yours or surrounding properties, and those who refuse to leave the property should eviction become a necessity, there are a host of things that can go wrong. So how can a landlord protect themselves from falling foul of a troublesome tenant and the associated costs that go with it?

There are three inter-linking, but entirely distinct, ways of both helping to prevent problems before they occur and ensuring you’re not out of pocket should the worst happen. Each type of cover can be bought separately, but the most comprehensive - and cost-effective - protection is when landlords take out the triple-lock of tenant referencing, plus rent guarantee and legal expenses insurance. All three are available from Alan Boswell Group, and cover can be provided whether you’re letting private dwellings, including HMOs and student lets, direct or through letting agents.

Tenant referencing

The natural first stop is the tenant referencing service, which also opens up full cover for rent guarantee insurance.

Finding the right tenant can be difficult; without knowing who they are, their renting history or their financial background, landlords are completely in the dark and choosing on a wing and prayer.

Tenant referencing removes the guesswork, providing a high degree of peace of mind that your prospective tenant can, and will, pay the rent.

The full service leaves no stone unturned in carrying out a range of checks to help landlords find the right tenant:

• Employment history check

• History of residency with previous landlord reference (if applicable)

• Data confirmed, bank account, identification etc

• Tenant credit check and affordability calculation

• Full written report

A more basic service includes just an identification check, credit check and an online report, while a company credit reference will look into business activities, CCJ history, profit and loss accounts and confirm business activities. All of which will shine a light on the likelihood of your prospective tenant being as good as gold, or a potential risk.

Should a prospective tenant fail the referencing checks, landlords can either proceed, reference a guarantor who can pay the rent in the event of any problems, or look for a different tenant. Once a landlord has found a tenant they are happy with and who has passed all the reference checks, they still need to protect themselves from unforeseen problems. Even the best and most reliable tenant can run into financial difficulties, whether as a result of redundancy, long-term illness or a reduction in their income.

This is where rent guarantee insurance, which includes landlord’s legal expenses as standard, can prove vital.

Rent guarantee and landlord's legal expenses

Rent guarantee cover protects your income from rental payments should a tenant default on payments, providing cover for monthly rental income up to £7,500, or up to £2,500 for multi-tenancy properties up to 25 tenants.

Cover also includes legal expenses (available as a standalone policy) up to £100,000 to cover the costs of evicting a tenant as set out in the Housing Act 1988, and other disputes including recovering costs for damage to the property above normal wear and tear, and tax investigation. Landlord legal advice is available via a 24/7 helpline, while rent guarantee insurance provides online access to a range of health and safety documents.

With the full suite of cover in place, landlords will have the benefit of not only having the best chance of choosing the right tenant, but also protecting their income and mitigating against legal costs should the need arise.