If landlords become involved in a property dispute or need to recover a debt, the cost of taking legal action often results in lost profit. In many cases bringing or defending civil action to protect their interests can be extremely costly and time consuming. Legal Expenses Insurance enables the policyholder to defend their legal rights when they need to, giving them financial peace of mind and invaluable guidance throughout.
• Up to £50,000 of legal costs
• Access to a 24-hour claims line
• Professional advice through a nationwide panel of specialists
Standard MSL Landlord cover provides legal costs and expenses for defence in respect of civil and criminal proceedings for both the policyholder and employees in the course of their employment.
Policy upgrades for:
• Property legal disputes
• Rent recovery
• Attendance expenses
• Property protection
• Rent guarantee
• Contract disputes
• Licence protection
• Issue – The tenant in a property stops paying rent and gives no reasonable explanation to the landlord for the lack of payment. Over four months the tenant fails to pay the rent in full when it is due and makes only very small payments towards the arrears. The tenant later leaves the property, and moves back to their previous address, failing to pay any of the arrears. The landlord is short by more than three months rent.
• Remedy – A solicitor is instructed to issue legal proceedings against the tenant for the outstanding rental arrears. Where a guarantor is obtained at the beginning of the tenancy the solicitors may also be instructed to seek a recovery from the guarantor, which is particularly useful when the forwarding address of the tenant is unknown.
• Issue - The landlord has struggled with a tenant who rarely pays the rent on time and occasionally fails to pay anything at all. In addition the landlord has received complaints from neighbours about the noise coming from the property, which is not being kept in a good state of repair. The landlord decides that the property is not proving to be a good investment and decides to sell the property. A notice to quit is correctly served but the tenant refuses to leave and stops paying rent altogether.
• Remedy – A solicitor commences legal proceedings to evict the tenant. A possession order is obtained from the Court giving the tenant instructions to leave by a fixed date. In the event the tenant fails to comply with the Court order, the policy will cover the cost of reapplying to the court to have the order enforced, which may result in bailiffs being instructed to forceably remove the tenant.
Tenant Property Damage
• Issue – At the end of the tenancy period the property is vacated. The landlord inspects the property to find that it is badly damaged. The carpets are unclean and stained, there are burn holes in the sofa, paper has been stripped off the walls and the interior doors have large holes in them, and require replacement. In addition, the whole property is in need of a thorough clean and the garden needs maintenance to cut back weeds that have been left to overgrow over a three year period.
• Remedy – After deduction of the deposit the landlord is left with estimates for the repair, maintenance and cleaning of the property, which exceeds £3,000. The deposit taken from the tenant at the beginning of the tenancy is used but does not cover the full amount required. Legal Expenses cover will instruct a solicitor to commence legal proceedings against the tenant for the outstanding money required. The legal fees are covered by the policy as well as fees for the Court and so the full compensation achieved is paid straight to the landlord to complete repairs.
• Issue - The landlord of the property has found that there is a structural problem with the property and as such has needed to carry out more inspections of the premises than usual. The tenant makes a complaint to the Police about harassment as they believe the visits from the landlord and the insurers to be excessively intrusive.
• Remedy – In the circumstances where it can be seen that the landlord acted reasonably and has reasonable prospects of success, a solicitor will be appointed to defend a criminal prosecution being brought against the insured.
Property and Squatter Protection
• Issue – A neighbour of the let property has built a fence marking a boundary and in the process claiming a large section of the landlord's property as if it were their own. In addition, the neighbour starts digging foundations up to the fence line with a view to building an extension on their house.
• Remedy – Having assessed the rights of the landlord agree that the neighbour is unlawfully claiming land that does not belong to them, is causing damage and threatens to permanently trespass on the land. A solicitor will be appointed to commence legal proceedings for a declaration as to the true boundary line and an injunction to have the fence removed, and the building work stopped.
• Issue – The tenant goes into rental arrears and the landlord issues a notice to quit for no payment of rent. MSL accept a claim to issue proceedings against the tenant for the recovery of rent and the eviction of the tenant. The tenant vacates the property leaving arrears of five months rent, which cannot be recovered as the tenant's whereabouts is unknown.
• Remedy – MSL will pay the landlord directly the outstanding rental arrears up to the date of the tenant's eviction after deduction of the policy excess.