Landlords advised to take out emergency assistance cover

Being a landlord is not always an easy business. In the course of a year they may have to contend with late paying tenants, an increasingly tough mortgage market and the upkeep of their property.

On top of all this, landlords may also wake up to tenants banging down their doors asking what they are going to do about the boiler that has broken and the ceiling that has caved in.

The landlord without emergency assistance cover may find himself running for the hills faced with such an array of unexpected problems, which could amount to a large maintenance bill that may not have been budgeted from.

A survey carried out by the Association of Residential Letting Agents (Arla), published last week, revealed that rental yields have experienced a marginal fall in the last quarter.

This was attributed to the number of new property developments entering the market, tempting tenants into new lets.

Landlords should bare in mind these figures as if their profit margins are likely to experience a slight downturn then handling expensive emergencies is likely to prove even tougher.

Tom Entwistle, editor of online community for home owners who rent their properties, Landlordzone.co.uk, has advised those letting out properties that it is "always a good idea to have emergency cover"

He added: "A lot of landlords do use that because it makes it easier for them to manage [unexpected events]."

Mr Entwistle also pointed out that landlords can take out rent guarantee insurance, which will cover them financially if one or more of their tenants defaults on payments.

"If they are worried that they might lose tenants it offers protection against rent arrears and it offers a certain amount of cover for legal protection as well, if the landlord has to take a tenant to court," he explained.

However, it is not just landlords that expose themselves financially by entering into a tenancy agreement.

On Saturday May 10th, BBC Radio 4's Money Box programme featured a Citizens Advice spokesperson and a representative from housing charity Shelter who both agreed that there are too many landlords not taking steps to protect their tenants' deposits.

By entering into one of the three official safeguard schemes available landlords can ensure that their tenants' bonds are secure.

The schemes were introduced last April for landlords in England and Wales and aim to reassure tenants that their bonds would not be withheld without good reason.

So far the schemes have attracted almost £900 million from landlords keen to boost their credentials to prospective tenants by signing up for the initiative.

Unfortunately, tenants cannot take out an insurance that will guarantee the return of their bond. The best they can do is take care of the property they are living in during the tenancy.

However, tenants would be advised to take out home contents insurance policies that will cover them for the loss of their personal possessions.

Those tenants with live-in-landlords should ask the home owner whether or not their belongings are already covered by an existing policy taken out for the property.