Landlords’ legal issues

How our cover can help

Landlords’ Legal Solutions protects private landlords of residential property against legal costs. A number of

different types of dispute are covered however the most significant policy feature is cover for repossession.  A typical claim would involve a tenant failing to pay rent which results in a landlord seeking repossession of their property along with recovery of the rent arrears owed to them.

Repossession

The policy covers mandatory grounds for repossession where property has been let as an assured shorthold tenancy, short assured tenancy or assured tenancy under the 1988 Housing Acts in England, Wales and Scotland.

Cover is also available to repossess if your property has been let to a business for an employee to live in, where you are a resident landlord and have licensed a room to a lodger, and for landlords in Northern Ireland.

Most repossession claims occur because the tenant has fallen behind with their rent. To obtain repossession it is essential that you have fully complied with the rules about protecting tenant deposits and you are required to correctly serve notice to the tenant to quit the property. Failure to do either of these things will interfere with your legal right to repossess.

Eviction

Different notices apply to terminate a fixed term tenancy (Section 21 in England and Wales or Section 33 in Scotland) while a Section 8 notice will need to be issued where the tenant has defaulted and two calendar months’ rent arrears have accrued. On service of a Section 8 notice the tenant has 14 days to pay up or leave. We can appoint a lawyer to issue eviction proceedings against your tenant if the notice to quit fails to have the desired effect provided that you chased your tenant for rent as soon as it became overdue.  You must also tell us that you wish to claim within 60 days of rent becoming overdue.   

Optional cover

To provide additional security and peace of mind, our Landlords’ Legal Solutions has optional cover to provide rent guarantee cover. This additional protection comes into force upon acceptance of a claim for possession and/or arrears and will pay the landlord from the second month of rent falling into arrears for five months under our six month policy or eleven months under our twelve month policy.

Website information guide

Our on-line law guide provides all the information you need to know about protecting your deposit and about serving notice to quit. You can also down load letters for references, tenancy agreements, Section 8 and 21 notices and various other free documents such as a letter demanding unpaid rent.  The legal services website is at www.araglegal.co.uk watch the two minute video tour from the home page to learn more about the site before entering your voucher code to register.

Helplines

If you prefer to speak to someone about a legal matter affecting your property our legal advisers are available 24/7 to provide free advice over the phone.  

 Lesley Attu

 Product Development Manager

Problem with your Tenant? Our Landlords’ Legal Solutions is here to help.

So how does the claims process work?

A typical dispute with a tenant involves them failing to pay rent which results in a landlord seeking repossession of their property and recovery of the arrears owed to them. If this happens then you need to start by serving the correct Notice on the tenant, examples of these, along with covering letters, can be obtained from the ARAG Legal Services website Link.  If you are in doubt as to which Notice to issue, you can call the ARAG legal helpline (a 24/7 service) for free advice.

If the arrears are outstanding for two calendar months, you will need to submit a claim to the ARAG Claims Department. This can be done in a variety of ways, including post or email. Our straightforward claim form lists all the information we need to assess the claim and our Claims Team are here to assist with any queries which may arise.

We will then provide an assessment on cover and, upon acceptance of a claim; we will appoint a law firm who specialises in landlord & tenant disputes. The lawyer will then proceed to deal with the legalities of obtaining possession of the property from the tenant and obtaining an agreement to repay, or a Judgment against the tenant for any monies owed.

We cannot always guarantee recovery of arrears if a tenant does not have the means to satisfy a Judgment. However, we understand the most important part of a claim like this is to ensure that vacant possession of the property is obtained as quickly as possible. Our Landlords’ Legal Solutions enables the landlord to achieve this and provides them with peace of mind and financial support should a dispute occur.

Chris Millward

Claims Assistant Manager

Our thoughts on FCA final report into add-on insurance products

Background

·         To recap – the FCA’s provisional findings to its Market Study of add-on insurance were published in March.  The FCA concluded that competition in add-on markets is not effective and that markets were not broadly working for consumers, with add-ons products offering poor value for money.

·         The Provisional findings provoked 65 responses from the insurance industry and consumers which focused mainly on the proposed remedies.

What did respondents say?

• Some respondents felt the “waterbed” effect where core premiums are reduced when add-ons are purchased should be considered in more depth.
• Generally respondents considered that the FCA had failed to take into account differences between products in forming their conclusions and that remedies assumed “one size fits all”.
• The FCA’s Proposal to ban opt out selling and to improve the way in which add-ons  are sold on price comparison websites received broad support – which is echoed by ARAG.
• Feedback opposed FCA analysis of firm data centred on the use of value as an indicator of whether markets were competitive i.e. the “Sun light" remedy which proposes publishing the claims ratio.
• Respondents felt for a number of reasons that the claim ratio was not a good indicator of value or profitability. They challenged the detail of the FCA’s calculations and identified practical difficulties associated with implementation of this remedy; although the remedy was supported by one consumer group.
• Respondents challenged the FCA’s conclusions about GAP insurance and focused on the negative effect the deferred opt-in method of sale proposed by the FCA might have on the GAP market.

Key messages from The FCA

The final report does not provide information about the FCA’s remedy work which is ongoing but focuses on the feedback received.

·         Overall the FCA has concluded that the feedback has not changed their overall conclusion that competition for add-ons is not effective.

·         The FCA reiterates that they recognise the value that some add-ons can provide (including the convenience they offer to consumers) and…

·         …that there are differences between the five products in the study and between different general insurance products more widely.

·         The FCA will apply cross-market remedies only where findings suggest that markets may

       be affected more widely.

·         The FCA recognises that remedies must be proportionate, and wider market impacts and unintended consequences must be considered in determining the design of measures to be implemented.

·         The feedback received on remedies made clear that there are no easy solutions to the problems the FCA is seeking to address. In particular the FCA acknowledges that with regard to the Sunlight remedy there are several complex issues to address before such a measure can be introduced.

Next steps

The FCA will

• work closely with industry and other stakeholders, including through a series of working groups which will be launched shortly,
• consult on proposed remedies later in the year. The timetable reflects the complexity of the issues at stake and the FCA’s desire to take on board the feedback received.

ARAG’s position

·         ARAG has no experience of GAP insurance and cannot comment on proposals to remedy defects the FCA has identified in the GAP insurance market.

•       We support a ban on selling add-ons by requiring customers to opt out of the purchase when they buy a core insurance product.
•       Our particular interest is in the “Sun light” remedy. We look forward to playing an active part in supporting the FCA to implement this remedy  so that it provides meaningful information to consumers and does not have unintended consequences.

We are concerned that unless the remedy can be refined consumers;

·         will be misled about the actual value of products since the FCA admits that no such measure currently  exists

·         will lose the convenience and protection of add-on insurance,

·         could be nudged towards expensive stand alone products (which will escape the requirement to disclose claims ratios ) and

·         will find that in the future added value features such as telephone legal advice and free digital legal documents, which are currently included within legal expenses policies but not reflected in the claims ratio, will be withdrawn.   

Lesley Attu

Product Development Manager

Trading times are tough …..

The Financial Times recently reported on the burden of late payment borne by small businesses http://on.ft.com/1sJMBMt. 

The article refers to data published by Bacs Payment Schemes, the direct debit company. BPS estimates the debt burden on SMEs is £39.4bn, up from £30bn in 2013 and higher than a previous peak of £37bn in 2012.

•  The research established that 60 % of SMEs are experiencing late payments, with the average company waiting for £38,186 in overdue payments.
• 72% of companies in the manufacturing sector were affected by overdue payments, followed by those in services (63%) and the transport, retail and distribution sector (48%).
• Businesses are incurring additional costs of £9.16bn a year because of late payments, with almost a third saying they were spending around £500 a month as a consequence of money owed to them. This figure could be as high as £10,000 a month as a result of the various costs associated with bad debts, including overdraft fees and administrative costs.
• One in four companies is spending more than 10 hours a week chasing late payments.
• The knock-on effect of late payments meant that a quarter of companies were being forced to pay their own suppliers late, with one in five saying late payments are forcing them to rely on bank overdrafts.

Mike Cherry, national policy chairman at the Federation of Small Businesses, said: “These latest figures are a further reminder of the major headache caused by late payments. Not paying on time and lengthy terms can have a seriously detrimental impact on small firms”.

…..ARAG can help 

• Our Essential Business Legal and Absolute Business Legal policies offer Contract and Debt Recovery as an optional cover.  Provided that there is a reasonable chance of obtaining and enforcing a judgment the policy pays legal costs and expenses up to £100,000 to pursue recovery. 
• Whether or not policyholders have Contract and Debt Recovery in force they can contact our 24/7 legal advice helpline for advice about their legal rights.
• The ARAG legal services website provides an on-line law directory and a range of on-line legal documents which registered users can create for free. www.araglegal.co.uk Policyholders who are new to the site can watch a two minute site video from the home page. They will need to enter their voucher code to register to create their own user ID and password. This is very simple and once it has been done policyholders can select documents from a menu and watch their document take shape as they build it on line by responding to on screen prompts. Guidance note accompany all documents. 
• A solicitor review service is available for some documents which are subject to a fee.

More about on-line legal documents

Policyholders can manage debt problems before they escalate by using our on-line legal documents. On-line documents can be created in minutes and stored securely on-line. 

      The debt recovery pack contains a suite of letters, or individual items can be selected, including;  

• Acknowledgement of a debt
• Guarantee for the payment of a debt (where the creditor has commenced legal proceedings against the debtor)
•  A reminder letter for an unpaid invoice
• Debt collection letters for unpaid invoices – an initial demand letter requiring payment for an overdue invoice, and a second letter to be used as letter before action if there is no response to the first letter.
• County court claim forms for debt recovery (Note – where debt recovery cover is operative policyholders can claim under their policy and we will take of this for them).
• Assignment of a debt.

Businesses can save significant additional costs and time as well as avoiding the knock on effects of late payments. If you sell Essential or Absolute Legal Solutions make sure your clients have their voucher code and get them to register straight away.

If you would like details of our commercial products please call us on 0117 3072278. 

Lesley Attu

Product Development Manager

Time flies by when you are having fun

I’ve already been here for two months and I must say that the time is flying by. Only three month left to get to know all other departments I haven’t worked for yet. The product development department is my “home” – where I spend the most of my time here because this is where I original come from in Germany “product development and innovation department” headed by Dr. Maslaton. But to know and understand the correlations of the UK insurance it is also important to learn more about the processes and structures of all the other main departments. Until now I worked for marketing and Claims Management Unit (CMU) both very interesting.

During my time here I have the chance to attend at two of your quarterly events. Fortunately one of them was the summer sports event on the Downs. Before this event took place I had no idea what to expect but know I can say it was a lot of fun with Ultimate Frisbee, Boule, Croquet and Giant Jenga.

Before somebody will ask – yes, we also played the games before starting to eat. Let’s have a look.

 

 

 

In Germany we only have one staff event a year but it is quite different. We aren’t as sporty as you, because of the size of the company it would be difficult to organize. The only activity we can do is dancing on the dance floor besides drinking and eating. But we have also a lot of fun and it’s always an amazing event, really good to get to know your colleagues offsite.