The last words a landlord ever wants to hear from a tenant is ‘see you in court’, but in some situations taking legal action is sometimes the only option.

If the tenant doesn’t pay their rent and/or there is another legitimate reason why a landlord wants to evict the tenant, after the usual eviction process of giving notice has been followed, the next step is applying to NCAT for a possession order. Legal proceedings are time consuming, and they can be costly, and that’s before you’ve added in the stress factor.

This is where your landlord insurance kicks in, so it is vital when you are reviewing your landlord insurance, you understand what your policy does or doesn’t cover for in the eviction process.

Generally, landlord insurance will cover you for three things:

Expenses

Expenses include associated costs to represent the landlord in tribunal for the purpose of eviction or loss of rent claims. This includes application fees (to the tribunal), and warrant of possession fees.

The policy may also cover reasonable expenses a landlord incurs when attempting to reduce their loss.

There may well also be terms and conditions such as the expenses is conditional on the insurer having accepted a loss of rent claim and the expenses have been incurred with the insurer’s prior written approval.

Representation

While a lawyer is not allowed to represent an owner at NCAT (NSW Civil and Administrative Tribunal) in NSW, a highly trained and knowledgeable property manager can – and their fees are covered in most quality insurance policies for having to go to NCAT.

Bailiff/sheriff fees

Sometimes it is necessary to engage a statutory authority (bailiff, sheriff or similar) to evict a tenant. As well as covering these costs, if the statutory authority ordered the door and/or window locks to be changed, the insurance policy may also reimburse for these.

Some landlords may think they don’t need to be covered for the eviction process because they are renting their property to a friend or relative who they know well. However, we know of a few cases where the landlord and tenant knew each other well but the relationship soured.

Furthermore, legal cover isn’t just about evictions and non-payment of rent. Whether it for poor maintenance leading to an accident or otherwise, a tenant may try to sue you if they are injured or their property is damaged; taking out adequate cover for evictions will give you peace of mind you’re covered for most eventuality.

We always advise you get at least two quotes from reputable insurance providers and compare the two. The cheapest option may not necessarily give you full cover, and sometimes it’s worth paying a few dollars more to give you peace of mind you won’t be out of pocket if something unexpected happens.

If you have any queries about insurance, or would simply like to know more about property investment, please do get in touch. We’ve helped thousands of people achieve their financial goals through property.

Give us a call on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au  or pop into our Cardiff office for an informal chat.

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