Introduction to Landlord Insurance - Landlord Insurance or Buy to Let insurance refers to a form of Buildings and Contents Insurance contract designed for persons who have bought property to let. The perils covered by the policy are almost identical to those covered under a standard home insurance policy except that the policy notes that the property is let and the liability section is worded so as to cover the landlords liability as property owner and as owner of the contents if the contents section is also covered. The buy to let insurance policy will also contain clauses limiting cover if the property is left unoccupied for any amount of time, usually the insurers will allow 30 days between tenants. Some are quite happy to insure the building for period sin excess of 30 days unoccupancy but you will probably find that a limited number of insurance perils will apply.

What is Building Insurance? - Buy to Let Buildings & Contents Insurance or Landlords Insurance is simply a form of Standard Home Insurance contract. The perils are fairly similar but the insurer knows that the property is let out to tenants. Buy to let insurance is becoming more and more popular as people increasingly turn to property as a means of funding for their future. A fairly typical set of perils under the policy will be as follows; Fire, explosion, lightning and earthquake, Smoke, Riot, civil commotion, strikes, labour or political disturbances, Malicious acts or vandalism, Storm or Flood, Water or oil escaping from any fixed domestic appliance or system including any costs in locating the source of any escape, Frost damage to fixed water or heating systems in the Home, Theft or attempted theft, The Building being hit by aircraft, other flying devices or anything dropped or falling from them; animals; falling trees, branches, telegraph poles, lampposts or pylons; falling Aerials; or vehicles. Subsidence or heave of the site the Buildings stand on or land slip.

Guide to Property Letting - over at the last few decades there has been a general failure by the UK population to adequately save for retirement. The massive increase in the buy to let investor market has become an alternative source of potential future investment. As stock markets fell around the world in the late 1990s, people's private pensions collapsed in a value. There has been a general mistrust of financial organisations management of private pension funds as a scandal after scandal revealed that's funds had been mismanaged or even defrauded. This dent in people's general confidence did nothing to promote the sensible long term message that none of us are saving enough into our pension already. To make matters worse, the decline in their state pension has been caused by an ageing population, coupled with a reduction in the amounts people are prepared to save. Pensions have been perceived as being flexible in that's their retirement age is fixed by their governments not the individual.

Glossary of Landlord Insurance Terms - we hope the following will help:-

Charge - an interest in land, which secures the payment of a present or future debt.

Collateral (Security) - This is traditionally used to mean some security in addition to the personal obligation of the borrower, but also commonly used to refer to a security provided in addition to the principal one.

Collateral Warranties - Arrangements giving direct contractual remedies to someone who is not a party to the principal contract.. For example a building contract will be between an employer and a contractor. A finance company has little or no right of action against the contractor if there is a defect in the building. The collateral warranty gives that right of action. It also gives the financer step in rights.

Common Parts - The parts of a multi occupied building which are not let to individual tenants but are either retained by the landlord, eg for the provision of services or held in common by the tenants for providing access for themselves to their own parts of the building.
These common parts of a building usually include; halls, stairways, passages, lifts etc.

Common Hold - a new form of freehold created by the Common hold and Leasehold reform act 2002. Whereby each individual flat or unit is a separate freehold and the reaming elements of the building are a " common part" owned by the owners of the flats who form a Common hold association- a private company limited by guarantee. The association has duties and rights to manage, maintain and insure the common parts of the building along with the individual flats.

Completion - The final step in the legal process of transferring ownership of a property e.g., when the documents in connection with a sale of land are signed sealed and delivered.

Concessionary Rent - A rent, which is lower than otherwise obtainable, granted as a privilege, sometimes with a gratuitous intent, to a particular tenant often at the beginning of the term of a lease.

Covenant - A legally binding promise, in a property context, the term is used to indicate the perceived ability of a tenant to meet his or her rent obligations- sometimes called covenant strength.

Demised Premises - The extent of land, (including any building or part of a building) subject to a lease.

Dilapidations - Those items of disrepair, which arise through breech of contract, especially by one of the parties to a lease, giving rise to a right to damages or remedial action.

Enfranchisement - In England & Wales where qualifying criteria are met, long leaseholders of flats have the right to purchase the freehold and superior lease such as a head lease of their building. This known as "The right to enfranchise." The opportunity to exercise the right occurs in various circumstances such as if the landlord is in breech of an obligation under the lease or the landlord wishes to sell his freehold interest in the building.

Exclusive Rent - Originally rent payable under the terms of a lease, which imposed upon the tenant an obligation to pay the rates. More commonly, today a rent under a clear lease, which makes the tenant responsible for payment of rates, costs and services and other outgoings.

Fag End - A term used for a lease having only a short time to run and normally having only a nominal value.

Finance Lease - A financial arrangement. The lessor is a financier who acquires the asset and takes the benefit of any available capital allowances. The lessee is the person who actually wants to use the asset, pays a rent for it and is responsible for maintenance and insurance. The availability of capital allowances provides a cash flow benefit to the lessor which is shared with the lessee in the form of reduced rental payments. Rental payments over the term of the lease are sufficient for the lessor to recover the cost of the asset plus a return on its investment. At the end of the lease, the lessee has the right to require the lessor to sell the asset at the best price obtainable. The proceeds are then rebated to the lessee.

Full Repairing (and Insuring) FRI lease - A lease, under which the lessee is responsible for the whole cost of repairing and maintaining and insuring the building.

Greenfield Site - A site, which unlike a Brownfield site, has not been previously developed, or used other than for agricultural purposes or as an open space.

Ground Rent - A rent payable for land under a lease for a specified period, which historically imposed, on the tenant an obligation to build on the land. Sometimes used to describe the element of a geared rent which is payable to the landowner. The obligations of the lease may extend to require the landowner to arrange insurance.

Heads Lease - A leasehold interest held directly from the freeholder and subject to one or more under leases of the whole or part of the building.

Housing Corporation - A body first established by Act of Parliament in1964 which promotes voluntary, non-profit making Housing Associations to provide homes for people most in need. It registers Housing Associations so that they may receive public funds to build new homes or to renovate older property. It then supervises and controls them to ensure that those funds are properly accounted for and effectively used.

Leasehold Reform. - Provisions made under the Common hold and Leasehold Reform Act 2002 which give improved rights and benefits to leaseholders such as the right to manage their own block of flats by the establishment of a "Right to Manage Company". At the same time it includes safeguards to protect the legitimate interests of the landlord and other occupiers of the building.

Lessee - A person owning a lease.

Lessor - The Landlord, granting a lease to a lessee.

Listed Building Consent - Official approval must be sought to demolish or alter a listed building or a building in a conservation area. Planning permission is sought from the local Public Authority with final decisions on listing being made by the Department for Culture Media & Sport.

Market Rent - Rent currently payable in the Market

Novation - The transfer of all benefits and obligations under a contract. The transfer requires the consent of the person to whom the obligations are owed. This is to be contrasted with an assignment, which is the transfer of the benefit only of a contract or other right and may not require the consent of the person owning the obligation.

Rent Back - Commonly used today to mean full open market rent under a full repairing and insuring lease.

Rent Free Period - A period, when rent is not charged as part of an offer to a tenant on the grant of a lease. In normal market conditions, a rent-free period is usually a few weeks or a few months to assist the tenant with fitting out costs etc In a difficult market, rent free periods are used to attract new tenants.

Rental Value - the rent that a property may reasonably be expected to command in the open market at a given time subject to the relevant terms of the lease.

Residual Value - In a finance lease, the value of an asset at the conclusion of the lease terms. In appraising a property development, the amount payable to pay for the site, i.e. the anticipated developed value less the development costs.

Restrictive Covenant - An obligation not to do something, such covenants are said to" run with the land "and there fore bind future freehold owners unlike" Positive covenants "obligations to do something. The distinction does not apply to leasehold land.

Tenancy Agreement - A tenancy agreement is a contract between a tenant and a landlord. It may be written or oral. The tenancy agreement gives certain rights to both parties, for example the tenants right to occupy the accommodation and the landlords right to receive rent for letting the accommodation. A number of agreements are common within the market, which have been established by the Housing Acts, namely Assured tenancies. Short hold Tenancies ( Scotland) and Assured Short hold Tenancies.

Tenants Improvements - Improvements to land and buildings or to meet the needs of and carried out wholly or partly at the expense of the tenant. When subsequently seeking a renewal of their lease, they may under the Landlord and Tenant act 1954 be entitled to the rent being assessed on the assumption that their improvements had not been carried out. If they vacate the premises they may be entitled to compensation under part 1 of the Landlord and Tenant act 1927, the basis of such compensation will reflect the extent to which their improvements have increased the rental value of the premises to the benefit of the landlord.

Commercial Property - Buy to Let Insurance involving the purchase of residential property is very popular. However another form of Buy to let involves the purchase of commercial premises for the purpose of letting. It is still possible to obtain buy to let insurance on Commercial Property, however the rating and cover is slightly different. The type of Commercial Building purchased for buy to let depends very much on the choice of the landlord but it is usually possible to obtain insurance cover for any of the following types of Commercial Building:- Shops & Offices, Social Clubs, Cafes, Restaurants, Public Houses, Guest Houses & Hotels, Takeaways and Unoccupied Commercial Premises. Usually the insurance company will require that the property has been purchased to let and that the Landlord does not live on the premises. However it may be possible to obtain cover if the Landlord occupies part of the premises, perhaps there is a flat upstairs etc. The type of cover on offer is similar to a residential buy to let policy in that the perils covered are almost identical. Policies will usually also contain Property Owners Liability cover and loss of rent by peril cover.

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