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Mon, 30 Apr 2012 12:00:00 EST The figures come after a third of those landlords surveyed mentioned that they had a tenant who had gone into arrears. Mr Graham Webster, the Managing Director of the aba Group stated that:
'This is a particularly difficult situation to be in. Many tenants sign up with the best of intentions, but the economic climate means that some face job losses and unforeseen circumstances that in turn, can leave them unable to fulfill their obligations. If you take GAME for example, having just entered administration, 2000 employees have just lost their jobs. With unemployment at such a high level, it might be quite some time before those members of staff are able to find new jobs; so for those renting, it makes for a very difficult position'
The same report does note however, that landlords can cover themselves from eventualities like this with specialist landlord insurance. Not only can such a policy cover against unpaid rent, but it can also cover or contribute to other associated costs.
'This is certainly true, with some basic forms of cover, unpaid rent is covered. The problem then is that efforts to collect the debt and other movements towards evicting tenants can cost even more, leaving you no better off than you were previously. A good Commercial Insurance Broker however, should be able to produce a tailored policy that can help cover the landlord for other costs associated with unpaid rent, such as removing a tenant and getting the property ready for a new one. The needs of every landlord are different however, and so it's well worth sitting down with a qualified Commercial Insurance Broker to find out what your options are' says Mr Webster
There are also other problems that can arise from renting. Homeowners are particularly vulnerable; in delaying the sale of their home until the market recovers, many are renting their properties or rooms therein to make up their income. What many do not realize however, is that normal home insurance policies are invalidated as soon as they are used to make a profit; leaving them at risk. It is advisable then, that those looking to rent out properties for the first time spend some time with a Commercial Insurance Broker to determine what they should and shouldn't be doing.
'As the banks are still less than willing to lend money to first time buyers, renting looks to remain the easiest option for many young people. Given the climate however, they also pose a significant business risk, as the case of GAME illustrates well. The business owner that thinks ahead will want to manage such risks and one of the easiest ways to do that is to speak with a Commercial Insurance Broker about a risk assessment. Luckily, many brokers have a wealth of experience in these fields and are best able to advise on what cover is required; and they can also advise on precautionary measures to help guard against risky tenants; like credit checks, contract wordings, references, deposits and so on' adds Mr Webster.
So if you're looking to rent out property, or if you have a portfolio that you would like to manage more effectively, contact your local Commercial Insurance Broker or the aba Group for a consultation today.
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About aba Group:
aba Group has been operating in Bolton for years, headed by Managing Director Graham Webster and fellow Director Lynne Eckersley, they have 70 years' experience in the industry between them. Their specialist insurance coverage spans schools and academies, directors, officers, contractors, engineers, landlords and a whole host of other professional roles and activities; which has seen them become the go-to business insurance brokers locally.
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The figures come after a third of those landlords surveyed mentioned that they had a tenant who had gone into arrears. Mr Graham Webster, the Managing Director of the aba Group stated that: