Rent and Legal Protection: The Safety Net Every Smart Landlord Needs

Rent arrears: a perennial problem among landlords, even for those with robust tenant vetting. And recently, there’s been a surge in rent arrears, as tenants battle volatile market conditions and higher costs of living.

In fact, government figures show around 5% of tenants are or have recently been in rent arrears. The average value of these arrears, according to rent arrears claims, is a staggering £2,064 – certainly not pocket change, even for successful landlords with multiple properties.

This uncertainty means every landlord should take out rent guarantee protection. As the name suggests, this guarantees the landlord receives their rent, even when their tenants can’t or won’t pay. And we offer it as standard to all landlords we work with, for a small upfront fee, paid annually.

But what exactly is rent guarantee protection for landlords? And how does a claim work? We’ll let you know below.

What is Rent Guarantee Protection?

Rent guarantee protection is taken out by us to protect our landlords against tenants defaulting on their rental payments.

Should a tenant fail to pay their rent within a reasonable time period, we submit a claim. If the claim is accepted, the company then pays out the value of the outstanding rent, plus covers the tenant’s rent until they begin paying again, up to 15 months.

Our rent guarantee has the following features:

• Cover for up to 15 months of rent, worth up to £3,750 per month. Properties with higher rent can still claim, but will not receive the difference between £3,750 and the rental amount.

• Vacant possession cover for up to three months at 75% of the rental amount.

• £100,000 in legal cover, to help in various ways, including with evictions.

• Section 8 Notice issued upon second payment being missed.

As with most policies of this type, pre-existing arrears are not covered by our rent guarantee protection. Also, claims must be made within 60 days. However, we’ll ensure they’re made promptly and in-line with the policy’s guidelines.

How Does Rent Guarantee Protection Work?

Of course, rent guarantee protection can be slightly complex, as you’d expect from such a policy. But we’ve done the hard work, reading through all the small print to ensure you get the best possible protection, for a highly competitive price.

Below, you can see a rough outline of how a claim works:

1. Take out protection: First, you’ll need to shop around and find the right cover for you. But at Payinless Property, we’ve already done this for you, saving you time and effort.

2. Contacting tenant: Should your tenant fail to pay the rent, we’ll contact them to request prompt payment. If we hear nothing back, we’ll attempt to contact them again.

3. File claim: Should nothing be heard back, we’ll submit a claim to the insurers.

4. Compensation payment: When the claim is approved and we’ve received payment, your compensation will be delivered via bank transfer.

5. Policy renewal: When your policy expires, you’ll need to renew to ensure you continue to receive coverage. However, as the policy is taken out by us, we’ll handle that, so you don’t need to worry.

As you can see, we do all the leg work, requiring very little from the landlord. It’s just another way we lighten the load while also safeguarding your income.

Why Use Rent Guarantee Protection?

Rent arrears don’t happen with most tenants, especially when tenants are vetted comprehensively, as happens here at Payinless Property. But even with the best planning, arrears will spring up occasionally.

If you’ve had rent arrears previously, you’ll know they can be devastating to a business. The loss of one month’s rent can tip the scales towards unprofitability, forcing the landlord to pay the mortgage and other costs out of pocket.

And if the problem persists for months, arrears can reach five figures, hurting even larger landlords with multiple properties.

Then there’s the problem of recovering the rent. Long legal battles often follow, accompanied by hefty legal bills, which are often never recouped. For some landlords, giving up and moving onto the next tenant is often the preferred option.

But even then, evicting a non-paying tenant can be a long and tortuous process, taking months, and this will only get more difficult when Section 21 evictions are abolished. What starts as one month of missed rent snowballs quickly, often becoming a significant financial problem for unprotected landlords.

In reality, most overdue rent is paid, usually within 6 weeks. But with rent guarantee protection, you can plan ahead with accurate financial forecasts, safe in the knowledge you’ll receive your rent, every month of the year.

How We Help

While taking out rent guarantee protection is undoubtedly prudent, navigating the claims process can be a little tricky. That’s where we come in. We’ve dealt with numerous claims while working for other agencies, finessing the art of reaching quick and successful resolutions.

While some input will be required from the landlord, we handle the bulk of the work, acting in the landlord’s best interests at every turn. And this comes at the cost of just 3.2% of your rent and legal cover - a small price to pay to guarantee your income.

Of course, before making a claim, we’ll work hard to secure the outstanding rent through effective communication. We build solid working relationships with tenants, and these relationships often allow us to resolve problems amicably and swiftly, without legal recourse.

Rent Guarantee Protection with Payinless Property

At Payinless Property, we provide rent guarantee protection as standard to our clients. Therefore, you never need to worry about going without. It’s another service we offer to de-risk the business of property investment.

Why not learn more about how rent guarantee protection, or any of our other landlord-friendly services, can help you by calling or emailing us today?