The Landlord Blog

Vacant Church to Be Turned Into Apartment Buildings – What Sort of Insurance Is Needed?

Circa 2003, on BBC News, a superintendent minister was quoted as saying that the Victorian-listed Ebenezer church building (pictured here), saved after an eight year campaign to open it to the public, “had more potential and better access” than another place of worship which was set to close down. 

That other place of worship—the old Salem Methodist site in Vauvert—was to be scrubbed to make way for apartments, and its congregants moved to Ebenezer, which would serve as a place for worship for the first time in a decade. 

That was a little over eight years ago.  Now, it has been determined, it’s the venerable Ebenezer church’s turn to experience an official reincarnation of sorts.  This St. Peter Port church, located in Brock Road, will–after 20 years of standing derelict and unoccupied–be developed into housing.

According to the BBC: “The church is owned by the Guernsey Methodist Circuit and now [that] permission has been granted, it will look to sell the site to prospective developers.”

What’s a would-be owner to do in terms of insurance? When dealing with flats or blocks of flats that are in mid-development, insurance might be a tad hard to come by. Or will it?

Builder’s insurance is a form of site insurance that often works well for developers. According to Self-builder,  there are a few standard construction risks that go along with investing time and money in property development. 

Here’s a list of what could possibly go wrong…incidents which a comprehensive policy would cover:

• Works which fall under the category of either permanent or temporary might collapse;
• Temporary edifices, fixtures and fittings might fall apart;
• The construction plant, tools and equipment might become a liability.

Too,

• An employer’s liability;
• Any public liability;
• Any personal accidents that ensue; and
• Whatever legal expenses are incurred

might need to be covered.

Additionally, a few extensions might be a good idea.  The cover to be considered might also include:

1.  A clause for damage or liability to surrounding buildings;

2. The loss of rental income–there are sure to be periods of flux during which many flats are left vacant; and

3.  The loss of mortgage interest.  This means that if there is an (insured) loss or damage, and you incur interest on your mortgage because the expected sale of a development has stalled, you’d be covered.

Let’s say, instead, that you’re the proud owner of a block of flats of this formerly sacred ground after the fact.  Now what?

If you end up purchasing such a site once it’s been developed, independent property consultants might urge you to opt for what they refer to as “specialist” insurance, or unoccupied property insurance. 

Since the Fire Protection Association (FPA) estimates losses due to fires, theft and vandal-style damage in the area of £100m each year, it makes sense to go for those covers, as well as for protection against storms, and leaks or floods. (These hazards seem to be excluded from most insurance policies, you’ll find.)

And, if the new block of flats have already welcomed a tenant or two when you take the property  over, you might also wish to look into  actual property contents cover

Googling “unoccupied property insurance – UK”will point you to other appropriate unoccupied property insurance sites.

In many respects, the old Ebenezer church will still have a great deal of potential and access as profits are turned and new homes are created.  And what better place to build new living quarters than a place formerly imbued with spirituality and goodwill—now buzzing with the energy of conversions and renovations—and suitable insurance cover. 

Graphic:  Ebenezer Church courtesy of BBC News. Guernsey.

-David Slade

Noisy Tenants? Legal Costs vs Expensive Earplugs

Are you putting your head in the sand as far as noise is concerned? Many will cite their neighbours as being at the root of stress and irritation. In some cases this can go so far as to affect the recipients professional and private lives. How many people I wonder would actually deal with this type of disruption calmly and quietly? It may be that you’ve already gone past the point of being civil when it’s time to raise the issue, but it is always best to try before temper sets in.

If you’ve already made an effort and it hasn’t worked what can you do?

Keeping a diary is essential, tracking when the noise occurs and noting down how long it lasts. Assuming you’ve already spoken to the person causing the irritation, the next step is to take the matter up with the people that own the freehold. They may be able to take action and it may carry more weight if action is seen coming from a third party.

If there’s still no change and you have evidence, try your local authority. Usually the environmental health department will carry out an investigation, and if necessary prosecute the individuals at the source of the disturbance.

The last straw

Talk to your solicitor, however beware. Initiating legal action can be expensive and time consuming. Get an idea of costs and try and choose a solicitor who has a track record in dealing with such matters.

Alternatives? Try a pair of expensive earplugs…

New Landlords Don’t Give Your Tenants Excuses For Non Payment Of Rent

If you are thinking about taking on a property to rent, it is important to familiarise yourself with the risks involved as day to day problems can completely overwhelm a new Landlord. If you are relying on rental property investment with the sole purpose of generating income and you have several properties, you need to make sure that any maintenance issues are dealt with in a timely and efficient manner. Tenants can often feel reluctant to pay rent on time if any issues are ignored.

Experienced landlords with their network of legal professionals and contractors can quite easily handle these problems themselves, but if you are a new landlord you really do need to protect yourself against any loss in income. When a tenant defaults, costs can start to get out of hand very quickly. In fact, the legal costs alone can run anywhere in between 1 and 2k. Then there’s the loss in rental income.

If you have already borrowed up to your limit to buy the property in the first place, you could quickly find yourself in a set of very unpleasant circumstances with your lender.

The solution? Do your homework. Vet tenants thoroughly and always make sure the property is maintained to a high standard. And where you can’t reasonably foresee an issue, make sure that you that you react quickly when one arises. Obtain the appropriate insurance cover to protect you in any areas of vulnerability.

Landlords: Steps To Ensure Regular Rental Income

Despite tough times, many landlords are looking forward to a prosperous 2011. In fact, a recent study by Paragon revealed that 54% of landlords were optimistic for tenant demand in 2011.

However, there is also growing concern that there is an increase in tenants struggling to make their monthly rental commitments. It is likely that this is down to job losses and pay cuts across the board, but what steps can a landlord take to minimise the risk?

There are always going to be difficulties predicting the security of a tenants future income, but before the start of any tenancy a landlord should adopt a rigorous checking process.

There are numerous companies that will help to minimise uncertainty by undertaking detailed tenant referencing checks. Depending on requirements, these can be carried out whether tenants have lived in the UK or internationally.

A good agent will have access to services such as these. Preferably choose one that is a member of the Association of Residential Letting Agents, this guarantees any monies between landlord and tenant fall under a money client protection scheme. Furthermore, agents who are members of the ARLA are required to be part of an ombudsman scheme which is helpful in the event of a problem.