 |
| Article
> Riots – The Real Cost for Landlords and Tenants |
|
Article kindly provided by Julie Ford
Hemel
Landlord Property Network
www.hlpn.co.uk
07904 288188
|
|
With
the recent, well publicised riots, London has
seen the worst arson and looting attacks since
1985 in Tottenham, Walthamstow, Brixton, Hackney,
Peckham, Ealing, Croydon and Clapham Junction,
but the violence has not been confined to the
capital, spreading to Birmingham, Liverpool,
Nottingham and even Bristol. It is estimated
the riots have caused over £200millions
worth of damage in London and the targeted towns
and cities across the country.
|
|
As the clean up starts, it is becoming more and more
evident that both private landlords and their tenants
have been equally effected by these mindless acts
of destruction, with many landlords discovering that
their tenants had to flee their homes in fear of masked,
knife-wielding gangs, while others have watched as
their homes and belongings burned to the ground leaving
them with nothing but the clothes they stood in.
This
is extremely traumatic for the tenants, who in some
cases have lost everything including the place they
called home, but the landlord is just as heavily effected,
with loss of his property to fire or being left with
a property so badly damaged it is currently an uninhabitable
property, either way the private landlord has been
hit from all angles. Not only has he got devastated
tenants but the bigger picture for a landlord is being
left with a property he can’t rent out, rent
he is not receiving, mortgage payments he can’t
meet, the cost of re-accommodating his now homeless
tenants, plus the cost of putting all the damage right.
Although
the Association of British Insurers (ABI) have reassured
landlords with rental properties in riot-hit cities
that their homes and businesses are protected, Hidden
in the small print of some UK domestic insurance policies
and some landlord Buy-To-Let buildings insurance policies
is a “get out” clause for liability. Under
what IS NOT covered, the phrase “ …riot,
civil disturbance, violent disorder, strike or malicious
acts”, will mean some UK home owners and landlords
having to foot the bill for the repairs to property
themselves. The ABI have advised that all landlords
should check their landlord property insurance to
see if they are covered for problems caused by civil
disturbances.
In
light of the expected number of claims, many insurance
firms have 24-hour claims lines, and the ABI confirms
most home insurance policies should cover riot victims
for losses due to fire, looting or vandalism. Anyone
who has lost or fled their home should also have cover
for alternative accommodation.
But
how do we move forward from this horrendous experience,
a number of local councils are planning to evict tenants
from their council houses who have been involved in
rioting. Apparently this is possible under the terms
of a council tenancy if the tenant or anyone living
at the property is involved in criminality or anti-social
behaviour. The council will need to get a court order
to evict them, but what can private landlords do?
If you have a clause in your tenancy agreement that
states your tenants can not engage is illegal or anti-social
behaviour and you have proof of their involvement
in recent events then you may have grounds to evict
your tenants, but, does anyone have an anti-riot clause
in their tenancy agreement? This is doubtful, and
is something that is being seriously considered by
a number of landlord groups who have been inundated
with concerned landlords who are counting the cost
of the vigilante attacks, but for now the best advice
that can be offered to landlords, is, if you know
or suspect your tenant has been involved in the recent
riots, then you must report them to the police.
|
When taking the daunting step to be a landlord,
most know and understand the importance of the
Building insurance, but most landlords are looking
to cut corners and fail to get the right insurance
to cover all eventualities that may befall a rental
property.
Similarly with tenants, most don’t consider
any form of contents insurance when moving into
rental accommodation, with most relying on the
myth that the landlords insurance will cover
them and their possessions as occupants, it
is very important that tenants take out their
own contents insurance to cover their belongings
should the worst happen.
|
|
|
If you are not covered by your current insurance or
if you have no insurance at all, all may not be lost,
you may have a claim under The Riot (Damages) Act 1886,
This Act permits insurers and insured to claim for the
cost of making good riot damage against the relevant
Police Authority. The relevant insurance policy might
offer an indemnity in the first place, but there will
then be the potential for the insurer to recover in
turn from the Police Authority. However any claim must
normally be lodged with that relevant Police Authority
within 14 days of the damage, otherwise there is the
risk of not being able to pursue any claim under the
Act. Because of that requirement to lodge a claim within
14 days, most insurance policies require that insureds
notify their insurers of the damage within 7 days. Failure
to notify insurers of the damage within 7 days may result
in the claim being rejected under the insurance policy.
All claimants including those with uninsured losses
all share a common interest therefore in notifying all
claims in a timely way both to insurers and to the Police
Authority.
What
can be claimed under the Act?
It is possible to claim against the Police Authority
for loss or damage to houses, shops or other buildings
and also property within those houses, shops and buildings.
What
is not covered by the Act?
Protection under the Act is restricted. There cannot
be any claim for loss or damage to cars on the public
highway nor for goods left in shops awaiting repair.
Importantly there can be no claim for consequential
losses, i.e. business interruption claims nor for personal
injuries sustained in the riots.
Requirement
to give notice
It
is unlikely that most insurers and insureds will be
able to quantify the losses sustained as a result of
the riots within 14 days. In these circumstances, it
is recommend that notice should be given to the relevant
Police Authority, within 14 days of the damage occurring,
providing them with as much information as possible,
including the time and location of the riot, the type
of losses sustained and, if possible, an estimate of
those losses and requesting an extension of time in
which to provide the quantified claims. The Police Authority
is not obliged to agree to an extension.
Where
it is considered that there may be uninsured losses,
insured’s should notify the relevant Police Authority
of those particular losses within 14 days. That notification
is quite separate to, and in addition, to any notification
given by insurers in respect of the insured losses.
Restrictions under insurance policies
Insurers
need to carefully consider their policies particularly
with regard to business interruption claims submitted
following denial of access to commercial properties
and loss of attraction where there has been no physical
damage to those properties and/or no strict denial of
access. Policy wordings and so the scope of cover will
vary but particular care is needed in the absence of
immediate, causative physical damage.
At
the date of going to press- The Prime Minister has announced
that the time limit in which to submit claims to the
relevant Police Authority under the Riot (Damages) Act
1886 will be increased from 14 days to 42 days and the
Secretary of State for Business, Innovation and Skills
has confirmed this in a written Ministerial statement.
We continue to monitor the situation and will provide
updates as and when developments occur.
|
|
About
the Author
Julie
Ford runs the Hemel Landlord & Property Network
The
network is predominatly designed for landlords
and property investors, we offer advice and guidance
on all aspects of buying, selling, renting and
managing your property, whether you are a 1st
time landlord or a seasoned investor The Hemel
Property Network has all the tools you need to
help you make the most of your investment.
We
meet Last Thursday of the Month, at 19:00 and
encourage our guests to arrive early so that you
can get to know your fellow property networkers.
Next
HLPN Meeting : 29th September 2011 - 19:00
Venue
: Holiday Inn Express - Apsley Lock - Stationers
Place, Hemel Hempstead, Hertfordshire HP3 9RH |
|
|
| |
|
|
Back
to Top |
|
|
 |
|
|
