Whether you are an experienced landlord or simply considering your options as a new property investor, there are ways of reducing your financial risks, the provision of a legal fees insurance policy being one very cost effective method.

For a relatively inexpensive fee a Landlord’s legal fees insurance policy can save Investment Property Owners a lot of headaches, heartaches and financial expense. This is because a policyholder gets the benefit of potentially thousands of pounds worth of pre-paid legal fees (called the limit of indemnity) for work best undertaken by a solicitor in the event that a claim is made and accepted under the cover offered by such a policy.

There is also a Legal Helpline provided with this policy which can often be used to manage situations initially, and the guidance provided can often prevent problems from developing.

There are many disputes between Landlords and Tenants which sadly result in costly legal action. For example, we often see claims from property owners where the tenant has breached the tenancy agreement (e.g. the parking of commercial vehicles on the property driveway or trading from properties in breach of the terms of the covenants which can bring complaints from neighbours and potentially lead to enforcement action against the Landlord). Other claims examples include those tenants that cause damage (e.g. wilful damage to either the building or contents) and then there are those who simply do not pay the rent, despite providing good credit references, and ‘sit tight’ waiting for the landlord to take legal action against them. In some instances a landlord may need to defend themselves against a legal action despite trying to take all reasonable steps to be compliant. All of the above will cost you time, reduce the anticipated profit or gain you were hoping to make, and in most cases cost you even more money to resolve.

If a landlord is faced with a tenant who refuses or is unable to pay their rent, it is important to act swiftly to begin the correct legal process to evict that tenant to enable you to re-let the property to someone who will pay.

Dealing with these issues is an expensive process with little chance of recovering the legal costs that have to be incurred. If the landlord tries to evict a tenant and uses inappropriate or improper methods, even something as simple as sending out an incorrectly completed eviction notice can result in a Court rejecting an application to evict and the process has to start again, inevitably meaning a further delay in gaining possession and re-letting the property. This can be a disaster, for example, if the income is relied upon to cover Buy to Let Mortgage payments or as a regular source of income to support the Landlord.

For a relatively small premium, all of these circumstances would be covered under a Let Property legal fees policy that will pay for legal assistance to represent the property owner’s interests. A further option is to arrange a rent guarantee, or indemnity, which will provide a monthly benefit to cover or subsidise normal rental income in the event a tenant defaults.

It is also possible to cover the property owner’s responsibility for emergencies affecting the let property such as the central heating system breaking down. This Landlord’s Emergency Assistance cover (subject to policy limits) would pay for emergency call out charges together with the cost of parts to effect a repair. This wide-ranging emergency cover can be arranged at a fraction of the cost normally quoted by Utility Companies.

It is vital to understand the potential consequences if the correct procedures or agreements at the beginning of a tenancy have not been handled properly. Landlords should ensure that agreements are drawn up correctly and the appropriate credit checks are undertaken before handing over the keys to their investment.

Good preparation at the beginning and during the lifetime of the tenancy should all hopefully go towards reducing the risks of being a landlord!