Letting Agent Rent Guarantee: The Importance of Your Tenancy Agreement
Posted by Let Alliance on May 10, 2017
Our nil excess Rent Guarantee and Legal Service for letting agents is designed to provide cover when the worst happens; a tenant defaults on rent and/or breaches the tenancy agreement.
Make Your Tenancy Agreement Watertight
The tenancy agreement at the start of the letting process is essential if a letting agent needs to make a claim. Here are the key points for making sure your tenancy agreement is fit for purpose for your Rent Guarantee protection. Some of this may seem obvious but can be the difference between a claim being delayed or at worst declined.
- Ensure all names are included in full and correctly spelt.
- Ensure the property address is included in full and accurately described – we recommend using the Royal Mail Postcode or Address Finder to ensure the property is identified correctly.
- Ensure tenancy agreements are signed by all parties.
- We recommend a separate Deed of Guarantee when a guarantor is required to secure the tenancy, to avoid the risk of argument that the guarantee ends upon re-granting a tenancy. If a guarantor is included in your tenancy agreement ensure that 1 and 2 above apply to the guarantor’s details, and that the guarantor has also signed the tenancy agreement. If you are using a Deed of Guarantee, ensure every Guarantor’s signature is witnessed. You can download an example Deed of Guarantee from the Vision Document Library.
- Ensure the rental amount is correct and matches the rent stated in your Rent Guarantee policy. The full monthly rent must be covered between tenants in order for the policy to be valid.
- Ensure the terms of payment are clear and keep them simple.
- Ensure your tenancy agreement contains a forfeiture clause, or for Scotland an irritancy clause to cover Section 18 Part 6 of the Housing (Scotland) Act 1988, allowing the landlord to bring proceedings for possession based upon default of rent payment. Most tenancy agreements include that clause as standard but it is worth checking.
When completing your tenancy agreements remember they are legal documents that, if you need to make a claim on your Rent Guarantee, will be subject to scrutiny by the court.
Making a Rent Guarantee Claim
You need to make a claim when you deem the tenant to be materially in arrears and you have performed your debt recovery process. You have 31 days from the point of first arrears to make a claim. If you’re in any doubt, please give us a call.
Make your claim online using our Vision system. Our claims team will work with you and our specialist solicitor partners to take the claim forward, including attempting to recover the debt from the tenant.
If you have any questions, please contact our claims team on 01244 421322.
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