Rental guarantee insurance charged to tenant!

Discoloco

Our letting agency are charging us for rental guarantee insurance. I said I don't want to pay it as the landlord should cover it and they have basically said tough! The property is highly sought after and if we won't pay it then someone else will.

We really want the property and have paid a holding deposit already. The fee was advised to us but I was a bit naive and did not realise that it was not standard! Admittedly it may be too late now!
Any advice?!

G_M

Disgraceful!

How will you be expected to pay this insurance? Up front? Monthly to the agent? Monthly to the insurance provider?

You could consider taking out the policy then cancelling it once you have your tenancy signed under the 14 day cancellation rule.

There again, the policy will presumably have to be in the landlord's name, not yours (since he'll be the one claiming!!), so you can't cancel it - hence my Q about how you're expected to pay. If monthly, you could simply stop paying it. Even if the tenancy agreement required you to pay it, you'd not be in rent arrears (assuming you keep paying the rent), and I seriously doubt any court would enforce a clause in the tenancy agreement like that.

moromir

Have you otherwise passed referencing or do you know you are unlikely to because of past credit history and rent guarantee insurance is a condition of the landlord accepting you? I'd say this is fairly pertinant information

paddyrg

Not just disgraceful, but also pointless - if you stop paying the rent, would it not be obvious you'd stop paying the insurance premiums too - meaning they cannot claim?!

Perhaps the agent is getting a financial slice of this insurance, and it isn't even a requirement from the landlord themselves, there are some nasty sharks out there.

Find another agent/property?

Discoloco

Around £250 upfront before we move in. Covers 12 months. I even asked if we could shop around for our own policy. No! The landlord uses the same insurer for all his properties. He has a portfolio of x amount of properties and all tenants have to pay. Agent admitted that it's not the way most landlords act but this is how it's done with this guy! Not there term apparently.
The property seems good value for money generally but this insuance business sends warning signals before we even move in. It seems we have little choice unfortunately.

theartfullodger

This is illegal in Scotland (sensible country)

HAMISH_MCTAVISH

theartfullodger wrote: »

This is illegal in Scotland (sensible country)

Makes no difference whether the charges are itemised up front or factored into the rent...

The tenant pays either way.

HAMISH_MCTAVISH

Discoloco wrote: »

. He has a portfolio of x amount of properties and all tenants have to pay.

this is how it's done with this guy!

The property seems good value for money generally .

Or he could charge more for rent to cover the insurance, be "average value" instead of "good value", end up charging tenants the same amount of money, and nobody would be complaining.

In any other line of business, people prefer itemised bills.

For some reason, tenants seem to get up in arms about it.

G_M

Discoloco wrote: »

Around £250 upfront before we move in. Covers 12 months.....The property seems good value for money generally but this insuance business sends warning signals before we even move in. It seems we have little choice unfortunately.

So
1) you refuse to pay for the insurance = you don't get the property
2) you pay and try to cancel/get refund - probobly hard as the policy will be in LL's name
3) you factor the extra £20 into the monthly rent - is it still 'good value'? If so, you could just swallow the bile though it does tell you a lot about your landlord-to-be.... If not, walk away.

Discoloco

Yep agree with the last couple of comments... It is a bit of a case of just get on with it!
What I don't understand is why the rent is just not a little higher... Makes me think that the agency are involved in the decision more than they admit.
Thanks for your time guys.

thequant

As mentioned above, factor it in to yourselves as extra rent.

However make sure you recieve a receipt and the LL state's what it is for.

There is a possibility you could sue for this money at the end of the tenancy, as the policy would effectively be yours, if that was the case it would be void. If it was void then the LL is entitled to a refund of his premiums, and hence you would be entitled to a refund from the LL.

If it's any consolation, the LL is throwing his money down the drain with this insurance. I use to work in this area and out of 80,000 policies we only ever paid 6 claims and even then they had to take the claim the full distnace to be paid out. In fact we subcontacted out the claims process to a 3rd party who a standard template to refuse all claims.

To be honest, LERG to give it's full name (Legal expenses & Rent Gaurantee) is the next big insurnace scandal once the PPI scam dies down. So keep that receipt as there still is a chance of claiming this money back in the future even if you can't get it at the end of the tenancy.