Are Your Tenants Invalidating Your Landlord Liability Insurance?

As a landlord, you've undoubtedly recognised the importance of having comprehensive landlord insurance to protect your property and investments. But have you ever considered that the actions (or inactions) of your tenants might be putting your coverage at risk?

Let’s explore how tenant behaviour might invalidate your landlord liability insurance and what steps you can take to safeguard your coverage.

What are my responsibilities as a landlord?

Being a landlord isn't just about owning property; it's about providing a safe, secure and compliant living environment for your tenants. Your responsibilities start before a tenant moves in and last throughout their tenancy. Here's a breakdown of your key responsibilities:

1. Ensuring habitability: The property you offer should be more than just a space; it needs to be a safe and habitable environment. Before any tenant moves in, it's important to assess the place for dampness, structural damages, or any signs of wear and tear from previous tenancies.

2. Safeguarding tenant deposits: When a tenant pays a deposit, you are legally bound to keep it in a government-approved scheme and return it once the tenancy is over, minus any genuine deductions.

3. Energy performance: As per legal guidelines, every rented property should have an Energy Performance Certificate (EPC). This certificate is valid for ten years and gives tenants a clear picture of the property's energy efficiency.

4. Timely maintenance and repairs: You're responsible for any repairs during a tenant's stay. Wear and tear is inevitable, but proactive maintenance ensures that the property stays in good condition. Anytime you need to enter the property, always give tenants plenty of notice and schedule visits at convenient times.

5. Safety checks for appliances: Safety isn't negotiable. It's extremely important to carry out regular gas inspections and maintain functional smoke alarms on every floor. For added transparency, we recommend that you always provide tenants with the related safety documentation.

6. Handling tenant data: Privacy is key. Any personal data you collect from your tenants should be stored securely and used in compliance with data protection regulations.

What can invalidate your landlord insurance?

1. Unauthorised subletting: Platforms like Airbnb have made it easier than ever for people to sublet properties. However, if your tenant decides to sublet your property without your knowledge or consent, it can invalidate your insurance. Many insurance policies have specific terms and conditions related to subletting, and failing to follow these rules can put your coverage at risk. Regular property inspections and clear communication with your tenants about the terms of their lease can help prevent unauthorised subletting.

2. Keeping unapproved pets: While pets can be a delightful addition to a home, they can also pose risks. From potential chewed furniture to stained carpets, unapproved pets can lead to insurance claims that might be denied if the pet was not disclosed. If you don't allow pets, make it very clear to your tenants and do regular checks to avoid invalidating your landlord liability insurance.

3. Modifications: While personalising a living space is natural, tenants sometimes make alterations to the property without permission. These changes can range from putting up shelves to more significant modifications. Such alterations can affect the value and safety of the property. It's important to state clearly in your lease agreement what changes are acceptable and which ones require your approval.

4. Absence from the property: Extended absences from the property can present various risks like burglary, water damage or issues due to a lack of heating during the winter. If tenants leave the property vacant for an extended period without informing you, it might jeopardise your insurance coverage, especially if something goes wrong in their absence. It's a good idea to include a clause in your rental agreement about the maximum number of days the property can be left unattended.

5. Unreported damages: Every landlord expects wear and tear in their rented properties. However, if damages go beyond ordinary wear and are not reported, they can accumulate and result in significant repair costs. Should an accident arise due to these unreported damages, your insurance company might refuse to cover it. You should encourage open communication with your tenants about any damages and consider regular property inspections as an effective way to keep track of the property's condition.

6. Animal infestations: Damages from infestations – particularly if they're due to unsanitary living conditions, structural issues like wall openings or a neglected garden – are typically excluded from standard insurance coverage. Regular care and maintenance could have prevented these situations. When tenants discover signs of pest infestation or sightings, they should immediately notify their landlords, who are responsible for addressing and resolving the issue.

Tenant responsibilities

Tenants are responsible for timely rent payments and additional expenses like utilities and council tax. They are also expected to maintain the property in its original state, addressing any minor wear and tear. During their absence, security measures should be in place.

For those living in shared accommodation, it's highly recommended to take out personal contents insurance to protect their belongings. If a tenant decides to move out, they need to respect the contractual notice period and leave the property as they found it. Guidance for UK landlords In the UK, letting properties is governed by specific rules.

Residential leases are typically assured shorthold tenancies (AST) under the Housing Act 1988, unless otherwise specified. This means landlords can reclaim their properties after six months, set market-based rents, and, in cases of unpaid rent exceeding eight weeks, have the right to possession. Both parties should be aware of these terms for a hassle-free leasing process.