93% of private renters do not understand the importance of Tenant Contents Insurance
With a recent surge of uploads to the UK’s largest Tenant History database, LandlordReferencing.co.uk has carried out an analysis as to why buy-to-let property damage registrations are on the increase.
The results are quite surprising, as the increase of complaints from landlord and agent members against tenants was not as expected in showing wanton destruction. The analysis simply showed that the damage to the property had come about by everyday, innocent accidents in the home that tenants could not either;
- ☆ afford to repair at the time,
- ☆ did not want to live with the damage
- ☆ and could not afford to lose their deposit at the end of the tenancy.
It seemed to be very simple; good tenants were falling foul of their tenancy agreement. Not because they wanted to but because they were living on a strict budget with expensive rents and living costs, and these tight budgets did not allow for any payments to be made in the event of a household accident or breakdown.
In one instance that was looked at in the analysis, a tenant’s young child had knocked over a candle in the lounge area and burnt a hole in the newly fitted carpet. At the six monthly check of the property the damage was spotted by the agent, who insisted that the tenant replace the carpet or lose their deposit – where the damage was valued at £682 (+VAT).
The tenant didn’t have contents insurance in place and therefore had no means of paying the £682 (+VAT) damages. They didn’t want to have an unsightly carpet burn in the middle of the floor but could not afford the replacement costs, so relationships broke down and the tenant decided to move out. This, of course, prompted the landlord to insist on using the tenants £550 deposit to replace the carpet and then raised an invoice for the tenant to pay the additional £132+ the vat to pay for the damage.
This is when the problems really escalated because, although the tenant had had a good relationship with the letting agent and the landlord, they could not afford the repairs, they could not afford the excess and they could not move out if they lost their deposit to put down on a new home.
The relationship between the landlord, agent and tenant continued to deteriorate until the tenant simply moved out – not paying the last month’s rent, as they had no choice but to use it for the new deposit on their new rental. The landlord then subsequently lost the last month’s rent payment and had to pay the additional amount to replace the carpet – leaving them £818 out of pocket.
The landlord then paid £350 and took the tenant to court for the outstanding balance. And, although they incurred a County Court Judgment (CCJ) against their credit file, the tenant still failed to pay the outstanding judgment. Furthermore, the tenant now had a County Court Judgment which would inevitably limit their ability to get a new home in the future (and even a new phone contact in the future) AND the landlord lost £1,168 including claim and court costs.
The interesting thing about this case is that neither party wanted this situation – the situation was brought about by a simple accident and exploded into a full-scale problem, simply because the tenant had no content insurance in place and had no additional cash to carry out the repairs.
As is the company mandate, we decided to look at this problem to help landlords, letting agents and tenants with this increasing problem and to see if we could find a resolution that would benefit all parties in the event of an accident in the home by a private tenant. This would entail a resolve that would maintain the good relations in the event of an accident, so we found a very simple answer that covered both parties in the future;
Once logged into LandlordReferencing.co.uk, subscribers will find a button on the Serviced Referencing Request Page which asks RentSafeUK to make sure the tenants have a current insurance policy that will cover the landlord’s possessions, that the tenant rents but will also cover the tenants belongings as well when being referenced through the Tenant Referencing UK portal.
Our Tenant Contents Insurance Policies start at just £90 a year and can even be paid by instalments of just £30 down and the balance over 10 months. We believe this is a small premium to pay in the event of an accident by a tenant in the home.