| Landlord Insurance UK Who is Responsible? - One of the many questions asked by landlords that causes a lot of confusion is where the responsibility for insuring a buy to let building rests. Buy to let property investment is very popular but with rising prices many landlords are now having to purchase flats and apartments which on the whole are cheaper than whole buildings. Some landlords also feel that buy to let flats in inner city areas offer a better rental yield and are better suited to the young professional market. The question of landlord insurance uk for flats and apartments needs a little explaining. If you purchase a whole building, you will almost certainly obtain it on a freehold basis. This means that as well as the bricks and mortar of the property, you also own the land on which in stands and will do so in perpetuity. As the freeholder, you are responsible for the insurance of the building and usually, the mortgage lender will not mind from whom you buy insurance, proving of course they are notified that the property is being used for letting purposes.
Freehold vs. Leasehold - When you purchase a flat or an apartment, you usually buy it on a leasehold basis. The lease granted gives you the right to occupy your portion of the building and make use of the common parts for a set period of time. This is usually 99,125 or 999 years. You do not own the land on which your building stands and at the end of the lease, if it is not renewed, your property will return to the freeholder. The freeholder owns the land on which the building stands and if for example there are 40 flats in the building, he or she will have granted a lease to each individual flat and will be entitled to charge ground rent on each one. This ground rent is usually only a few hundred pounds a year but the freeholders other duties will include sourcing and arranging the insurance and charging and collecting any service charges. Many people are confused over the role of the freeholder and try to arrange their own landlord insurance uk on just their portion of the building. Although this is not impossible to do, it is better if the property is insured as a whole. In some cases, it is not always possible to trace the freeholders insurance and in these cases, some people elect to insure their own portion of the building. If this is the scenario that you are facing, don't forget to tell your insurer that you are only insuring your own section he building and they will want an explanation why. If you are purchasing a flat in a building are you are provided with the freeholders own building insurance policy, make sure you advise the block insurer that you have purchased your property as a buy to let. Many solicitors are also confused over who should or should not be insuring a building so remember, the general rule is. If you are the freeholder, you should insure the building, if you are a leaseholder, you or your solicitor should contact the freeholder and discuss insurance arrangements with them
Risks - most Landlords remember to purchase Buildings and Contents Insurance for their Buy to let Properties but often over look many of the other types of contract available to them. There are many risks associated with being a Landlord and a good Legal Expenses Insurance contract can help to reduce the worry of financial losses. A variety of policies are available on the market costing anywhere from 35.00 pounds upwards. So as a Landlord, what are the things you should be concerned about; firstly, Breach of Tenancy Agreement, the tenant make break the terms of the tenancy agreement and you may have to appoint a solicitor to help you sort it out. Eviction of the Tenant, one of the major problems of a non paying tenant is that as well as not receiving income on your buy to let, you are hampered from re letting the property to a paying tenant. Often legal Expenses Insurance will cover this for you as well as perusing the unpaid rent. As a landlord, you may be on the receiving end of civil or criminal proceedings in respect of any act or omission whilst caring our your Landlord duties, it is important to take out cover against this situation. Some Legal Expenses policies will also include cover for tax enquiries or in depth investigations in to your Tax affairs. You may also become involved in PAYE or NIC disputes, a phone call to an Accountant may help sort this out. Most policies for legal expenses will also include a 24 hour legal Expenses Helpline, this is a great help if you just want to talk to someone about a problem. It seems strange that a lot of people are willing to pay thousands of pounds for property in the hope to make money yet overlook to pay a small premium to help them if troubles to occur, only a few pounds a month can help reduce some of the major worries of being a Landlord
Lettings Management - When you decide to purchase property for buy to let mortgage purposes, there are many pitfalls you will face as a Landlord. Adopting a risk management approach to your lettings will help to minimize your problems. Here are some to help you on your way:- -
Have a record of electrical inspections carried out not more than 5 years ago -
Make sure you have a current Corgi Gas certificate -
Make sure that any furniture without safety labels is removed from the insured property -
Always provide user manuals to the tenant -
Make sure the Gas certificate is given to the tenant -
Make sure your tenants have a valid Tenancy Agreement Ensure that any Fire Doors fitted have a minimum of 30 minutes fire resistance -
Provide a Fire Extinguisher & blanket for the kitchen -
Remove any portable gas or paraffin heaters from the property -
Check for any multi pin adapters in the property to guard against overload -
Check that any waste bins are stored at a safe distance from the property -
Check that any Flat roofing has been recently inspected -
Check that water tanks and any exposed piping have been lagged correctly -
Make sure there are no minor leaks in the bathroom or kitchen -
Make sure that all external walkways are free from trip hazards -
Inspect Buildings for loose tiles or fittings fit good quality locks to doors and windows -
If possible install exterior security lighting Policy Wording - most landlord insurance uk policies will only provide you with full cover if you property is occupied by a Tenant. Once the building becomes unoccupied, certain restrictions in cover will apply. Most insurers will allow you a period of 30 days before these restrictions come in to force. It is very important that you study your insurance policy wording as you may find yourself in a situation where you have not got the cover you require. Usual restrictions to unoccupied property include, the exclusion of Theft & Malicious Damage cover & The exclusion of Burst Pipe cover. As well as cover exclusions, you may find that your insurer requires you to visit the property at least once every 14 days to make sure that the house is safe and secure. Further they will probably require you to drain down the water systems and switch off all the services. Some insurers will allow you to keep the electricity supply switched on if you intend to leave the central heating system on. If you are in any doubt as to the extent of your cover, it is always best to check with your insurers.
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