Illegal activities and organised crime has recently become a contentious topic in the property industry. New challenges are in store for landlords, where they must report any suspected criminal activity within their let properties, as per the Bill passed in the Queen’s Speech, June 2014.

The new legislation puts a greater responsibility on landlords as they are considered to be running a business and therefore should not “turn a blind eye” to criminal activity. The new rules will also affect corrupt lawyers and other professionals who are involved but claim they are unaware of the illegal activities.

The increase in illegal activities in buy-to-let properties highlights how easy it is for prospective tenants to bypass checks and move in. The lack of contact between the tenant and landlord is key to this growing trend.

CannabisHow this affects your landlords

Whether your landlords are aware or unaware, any criminal activity is highly likely to result in major damage to the let property.

Whether your landlords are aware or unaware, any criminal activity is highly likely to result in major damage to the let property.

Criminals running drug laboratories, cultivating cannabis farms and trafficking activities are likely to choose properties where the landlords offer little in the way of communication and maintenance.

This allows tenants to make huge adjustments to the property to create environments suitable for drug cultivation or trafficking, while also increasing the risk of fire hazards and structural damage. The cost then lies with the landlord to get it back to liveable standards if their insurance does not offer cover for malicious damage caused by tenants.

The right cover for your landlords

Malicious and criminal damage by tenants is usually an exclusion clause in standard let property insurance. It is important that brokers ensure their landlord customers are aware of this clause and encourage them to choose policies that cover malicious damage. Many policies also include an illegal activities clause which would remove cover if a property is used by the tenant for illegal purposes, such as cultivation of drugs.

 

Tips for your landlords

  • Ensure potential tenants are comprehensively vettedChoose landlord insurance with malicious damage cover
  • Choose landlord insurance with malicious damage coverCheck policies for any illegal activities clause
  • Check policies for any illegal activities clauseRental payments on a monthly basis
  • Rental payments on a monthly basisRegular contact and maintenance checks
  • Regular contact and maintenance checksMonitor electricity bills for huge rises or falls
  • Monitor electricity bills for huge rises or falls

Moving them over to cover that includes malicious damage

The key time for property insurance brokers to address this issue is at inception or renewal. Brokers that offer a wide range of landlord insurance options that include malicious damage, stand up to market needs.

Offering property insurance with malicious damage cover

Stride Insurance Group offer brokers access to property insurance that includes malicious damage cover along with cover to include cultivation of drugs within a let property. Simply contact your account manager for more information.

Find out more about the Stride Group schemes

Contact us on 023 9224 8790 or contact your local account manager, who will happily discuss our facilities in detail.