Tenants Liability Insurance Makes A Huge Difference

Tuesday, April 28, 2015

Tenants Liability Insurance Makes A Huge Difference

Tenants Liability Insurance Makes A Huge Difference

Tenants Without Tenant Liability Insurance
Don’t Always Get Full Deposits Back

A new survey has revealed that over half of private rented sector tenants who have rented properties in the PRS during the last 5 years and who didn’t have tenants liability insurance, didn’t get the full value of their deposits back when the left their rented properties.

The survey of 1,034 PRS tenants and former tenants conducted by a removal company discovered that 52% of tenant deposits were either fully or partially withheld by landlords to cover damage and repairs to the rental property.

If these figures are based on the Government estimate of the number of households living in the private rented sector then it would be the equivalent to withholding more than 400,000 tenant deposits each year.

80% of PRS tenants also reported some degree of difficulty getting the full value of their deposits back, a situation that could have been avoided for just £60 per year for tenant liability insurance from Legal 4 Landlords.Accidents do happen, even in rented property, and paying for damage to be repaired can be expensive, but even if the damage is accidental it is still the tenant’s responsibility to pay for the repairs or the landlord will be entitled to deduct the cost of such repairs from the tenant’s deposit.

Cleaning and minor repairs are among the most common reasons for some or all of the tenant’s deposit to be withheld, with landlords using detailed inventories and photographs taken before the start of a tenancy to decide if the condition of the rental property has deteriorated due to natural wear & tear or if tenant is liable for any deduction from their deposit due to unreasonable or accidental damage caused.

Tenants liability insurance covers accidental damage claims for rental properties up to £2,500 (GBP), providing both tenants and landlords with added peace of mind, knowing that any damage claim will not affect the value of the tenant’s hard saved deposit.

The survey also found that:

  • 27% of tenants claimed their letting agent or landlord delayed returning their deposit despite no deductions being taken.
  • 20% of tenants got their full deposit back without any problems
  • 26% of tenants managed to get their deposit back in full only after a dispute with the landlord or letting agency.

Tenants liability insurance is a very useful insurance policy for tenants in rented properties because as with nearly all residential tenancies, it is the tenant who is responsible for repairs if they cause any damage to the property (even if it is accidental) to the building itself and any fixtures, fittings and furniture provided with it.

If the value of the tenant’s deposit does not cover the cost of the repairs the tenant is still liable and will be expected to pay the difference. If there is a guarantor in place for the tenancy, then they too could also be asked to contribute towards the cost of the repairs to the rental property, so tenants liability insurance really is great value.

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Insurance. Tagged , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.