All posts by alanbos

How Best to Ensure Your Unusual Property is Protected

While most houses owned by buy-to-let landlords tend to be relatively conventional in construction, this is by no means always the case. ‘Standard’ or ‘conventional’ construction is generally defined as applying to properties built of bricks with a slate or tiled roof. Obvious examples of non-standard properties include timber-built premises and those with thatched roofs, there are however many other forms of construction that demand special attention from insurance companies.

Perhaps one of the most common non-standard forms of building was once the post-World War 2 prefabricated home. But there have been many periods in the past when the need for rapid construction of homes has led to some experiments with building techniques, as well as some of the more deliberate attempts to create unique properties. Building regulations before the mid 20th Century were far less restrictive than latterly and this could have resulted in some unusual builds.

Premiums

One of the questions insurance companies ask, when you take out a Landlord Insurance policy with them, relates to the construction of the property. As a general rule, in the event of inability to confirm that the property is of standard construction, many insurance companies will ask for an additional premium.

Difficulties and delays with claims

It is important to be aware that non-standard construction could lead to delays – and additional costs – in rebuilding after a fire or other damage. This means that care must be taken in assessing the right level of sum insured for the property. Where special materials have to be obtained to match existing ones, this can add considerably to the rebuilding cost and thus the amount of cover required.

The most obvious example of this is where the property is ‘listed’ and has to be rebuilt in a particular form and using as nearly as possible original materials. This can be very costly and you should seek professional advice if you own a listed building.

Making Sure

If you are uncertain about the construction of your building, you should ask for help; it is better to take a little extra care, than to find that your landlords’ insurance is inadequate, when the time comes for a claim.

Getting the Right Advice

It is important to seek independent professional advice before making any decision about your property owners’ property and liability insurance as well as your financial obligations. You should always ask your insurance advisers like Alan Boswell Insurance Brokers what experience they have of dealing with residential and/or commercial rental property insurance.

Nothing contained in the article should be considered as giving individual financial advice. Please note that there may be variations for those living in or letting property located in Scotland and Northern Ireland.

For more details visit: http://www.Alanboswell.com

Alan Boswell Insurance Brokers Limited

Harbour House
126 Thorpe Road
Norwich
Norfolk
NR1 1UL

01603 218000

What To Do When Your Property Has Extended Un-Occupancy

Landlords can find their premises unoccupied for extended periods for a number of reasons; for example, simply because one tenant leaves and it takes time to find an acceptable replacement or, in more severe cases, because the area is changing in character and prospective tenants are thin on the ground. Or it may be that you have decided to sell the property and do not want sitting tenants slowing the process down.

Steps to take

Whatever the reason, you must advise your Landlord Insurance company or broker that the premises are empty because this can have an effect on the policy – it may also be a policy condition that you do so, unless the period is very short, perhaps less than three or four weeks. During a period of unoccupancy, certain covers may be excluded, such as water damage and malicious damage.

Protecting your interests

Simply advising your property owners’ insurance company is not enough, however. You also need to take active steps to protect your property by inspecting the premises internally and externally at least every seven days, having previously taken all reasonable steps to make sure that the premises are secure.

Good practice suggests that water and other services should, where practical, be drained down &/or switched off – unless, of course, you have a sprinkler or alarm system that requires power or water, or a central heating system is being run to protect the building from frost damage. Any combustible or waste material should be removed from the premises and the property should be kept in a good state of repair.

Failure of duty

Depending on the type of policy you have, some of these precautions may be policy conditions and failure to comply could invalidate your insurance altogether – or at least allow the insurance company significantly to reduce the amount of any claim that you may have to make. Your landlords’ insurance policy may carry an excess in the event of a water damage or malicious damage claim while the premises are unoccupied.

Getting the right advice

It is important to seek independent professional advice before making any decision about your property owners’ property and liability insurance as well as your financial obligations. You should always ask your insurance advisers like Alan Boswell Insurance Brokers what experience they have of dealing with residential and/or commercial rental property insurance.

Nothing contained in the article should be considered as giving individual financial advice. Please note that there may be variations for those living in or letting property located in Scotland and Northern Ireland.

For more details visit: http://www.Alanboswell.com

Alan Boswell Insurance Brokers

Harbour House
126 Thorpe Road
Norwich
Norfolk
NR1 1UL

01603 218000

Is the taxman after you?

With WikiLeaks threatening to release information about people with offshore money that is not declared for tax, it might appear that they have more to do than concentrate on ensuring that landlords pay the right amount of tax. But in fact HM Revenue and Customs appears to be as keen as ever to chase after what it might see as the ‘soft target’ of UK residents who inadvertently may not declare all their income.

Not always straightforward

There are exemptions from income tax for those letting rooms in their home for less than £4,250 a year (£2,125 if letting jointly) in total. But for everyone else – which will include most residential landlords – this is a business with the usual rules about all income less allowable expenses being subject to tax.

Confusion can arise over what are legitimate business expenses and it is here that opportunities arise for errors. For example, setting Landlords Insurance, agents’ fees and maintenance costs against tax is usually perfectly legitimate, but some other costs may be less easy to determine. For example, running a car out of the business to visit your premises may be challenged if you only let out the house next door!

And, of course, any capital gains are potentially liable to tax, because this is not the owner’s principal residence; so an increase in value could, on eventual sale, incur tax at 18% or 28%.

Has anything changed?

Apart from the fact that the government needs to find every penny it can to help reduce its borrowings, there is nothing new in HMRC seeking to collect tax where it may have been missed. Indeed, many accountants already recommend insurance to cover the cost of an HMRC investigation into clients’ tax affairs, because the time and effort involved can be significant. This is generally included in a Landlord Insurance policy, but should always be checked and confirmed when taking out the policy.

But HMRC does not confine its interest just to those landlords it knows about from previous returns. It is also looking hard to discover residential and commercial landlords who are not declaring their taxable income at all – perhaps because they do not realise that they need to do so. This campaign has been going on for several years and can be expected to continue.

It is important to be aware that an HMRC enquiry could result not only from information that it has – for example that you have a buy-to-let mortgage – but also from ‘profiling’ that suggests you may have property that you let. It also appears that some enquiries are initiated on a random basis; and once started, simply having done nothing wrong in your tax affairs is no defence – you have to be able to demonstrate this to the taxman’s satisfaction.

Getting the right advice

It is important to seek independent professional advice before making any decision about your property owners’ property and liability insurance as well as your financial obligations. You should always ask your insurance advisers like Alan Boswell Insurance Brokers what experience they have of dealing with residential and/or commercial rental property insurance.

Nothing contained in the article should be considered as giving individual financial advice. Please note that there may be variations for those living in or letting property located in Scotland and Northern Ireland.

For more details Visit: http://www.Alanboswell.com

Alan Boswell Insurance Brokers Limited

Harbour House

126 Thorpe Road

Norwich

NR11UL

UK

01603 218000

info@alanboswell.com

Rehousing Tenants after a Major Event

It can sometimes be forgotten that when landlords let their property, they are entering into a contract with the tenants to provide living (or business) accommodation for a fixed period, during which rent will be paid to them.

Of course, nobody can foresee the future, so a fire or other major damage to the property could take place at any time, making it impossible for the landlord to fulfil his or her legal obligations to provide the accommodation.

What is the solution?

Fortunately, Landlord Insurance can be arranged that covers the cost of temporarily rehousing tenants while the insurance claim is sorted out and the property repaired or rebuilt.

This will normally be for up to 10% of the insured value of the property, so the maximum cover available to rehouse a tenant of a property insured for £150,000, would be £15,000, or up to £1,250 a month.

If the tenant is lost, Landlords’ Insurance can still provide a benefit for you, in the form of recompense for loss of rent for up to 12 months. In this case cover will usually be for up to 20% of the buildings sum insured.

Not just while the property is repaired …

For some properties, repair or rebuilding may take longer than usual. In other cases, the tenancy might run out before the work required making the property habitable again (when the loss of rent cover ends) can be completed. Should this happen, you would be left without a tenant or rent protection.

To protect against this possibility, you can arrange loss of rent insurance on an alternative basis that pays you the rent right up until you actually have another tenant in place. This is particularly important for commercial property, when finding new tenants can be far more difficult than in the case of residential lettings. Such cover is more expensive, but provides greater protection.

Getting the right advice

It is important to seek independent professional advice before making any decision about your property owners’ property and liability insurance as well as your financial obligations. You should always ask your insurance advisers what experience they have of dealing with residential and/or commercial rental property insurance.

For more details Visit: http://www.Alanboswell.com

Alan Boswell Insurance Brokers Limited

Harbour House

126 Thorpe Road

Norwich

NR1 1UL

UK

01603 218000

info@alanboswell.com

Why bother with “all risks” insurance?

Insuring your property is all about protecting an investment. After all, you are in business to make money, so ensuring that you are not exposed to the risk of unnecessary financial loss makes sense. But it can sometimes be tempting to cut a few corners in order to save money.

In the long term, this can be an error – saving a few pounds now could cost you more in the longer term, if you do not have adequate insurance.

How much landlords’ insurance cover do you need?

Most of us today insure our own homes on an “all risks” basis. This means that we are protected not just in the event of fire, earthquake, storm, burst pipes and the usual range of ‘perils’ but also should our buildings or their contents suffer accidental damage that does not fit precisely into the more traditional definitions.

Having wider cover makes considerable sense, because Landlords Insurance written on an ‘all risks’ basis not only removes some possible causes for argument with an insurance company about what was the actual cause of damage, but also includes classes of damage that were certainly never intended to be insured under the older policies.

For example, while insurance policies on buildings have, for many years, covered accidental breakage of such items as fixed sanitary installations and windows, dropping a heavy vase on a work surface in the kitchen, badly damaging the work-top and smashing the vase itself, would certainly not have been covered. Under an ‘all risks’ buildings and contents policy wording, however, the cost of replacing the vase could be covered, as well as that of repairing the work-top.  A small excess will normally apply, but the cost of replacing a damaged item could be much higher.

Is this worthwhile for rented property?

The question remains whether this approach is appropriate – or necessary – for property that you rent out. After all, you have no control over how tenants will treat your property and therefore may not install the most expensive items in the building.

Conversely, your property represents an investment for you and the condition that it is in when you come to re-let it will influence the level of rent that you can expect. So if you can ensure that any damage to your property is reported to you immediately by your tenants and then your Landlords Insurance Company informed so that they can pay for repair or replacement, not only will your investment be better protected, but your tenants will enjoy a better environment.

All risks insurance offers you and your tenants peace of mind and need not be much more expensive than more traditional cover.

Getting the right advice

It is important to seek independent professional advice before making any decision about your property owners’ insurance requirements as well as your financial obligations. You should always ask your insurance advisers what experience they have of dealing with residential and/or commercial rental property insurance.

For more details Visit: http://www.AlanBoswell.com

Alan Boswell

Harbour House

126 Thorpe Road

Norwich

NR11UL

UK

01603218000

info@alanboswell.com