Landlord trying to insist on fixed-term lease as unable to renew insurance otherwise

Selik · 11-07-2014 04:08PM #1

We recently fully moved onto a part 4 tenancy in February after our initial 12 month fixed term lease expired.

The agent is now claiming that we have to signed a fixed term lease or their insurance company won't renew the house insurance and that no other company will quote them.

This doesn't sound correct or fair to me at at all from a legal point of view - does anybody know where I stand on this?

I'm suspicious as back in February the agent was insisting we had to sign a new lease and that their policy was "fixed term" leases only (such rubbish I know) and only backed down when I insisted we didn't have to to sign a new lease and quoted the Residential Tenancies Act 2004.

Now the agent is saying (exact text below):

"The landlord has asked me for a copy of the renewal tenancy agreement and I had explained to her that you did not wish to sign another 12 months fixed term. My manager has informed me that this should have not been agreed and that all our agreements are on fixed term.

The house insurance on the property is due up for renewal and the insurance company will not renewal her policy as no new tenancy agreement has been signed. Obviously this is a problem for the landlord as she insures all her properties and wants this to be done immediately.

She has explained to them the situation on the lease but they have informed her that the policy will cease without it.

Can I please send the renewal over to you for you to sign as unless the insurance company has this they won’t renew it nor will any other insurance company she goes to."

Any help or advice appreciated as I have been on part 4 tenancies wherever I've lived without issue and I will only sign a new fixed term lease if absolutely necessary, although I don't mean in a legal sense.

Paulw · 11-07-2014 04:10PM

Sounds like rubbish to me, and sounds like they want a contract.

The_Morrigan · 11-07-2014 04:25PM

My Bullsh*t radar just exploded....seriously worried about some of these professionals at times.

drumswan · 11-07-2014 04:33PM

Giles wrote: »

Any help or advice appreciated as I have been on part 4 tenancies wherever I've lived without issue and I will only sign a new fixed term lease if absolutely necessary, although I don't mean in a legal sense.

Ignore them.

Selik · 11-07-2014 05:14PM

That's what I did before (ignored the agent after quoting the RTA 2004)but now that the insurance issue has reared it's head I don't want to cause an issue for the landlord as we have a very good relationship with her.

It doesn't sound legal or correct to me that an insurance company can refuse insurance on such a basis but I checked with a friend of mine who works in the area of house insurance and he said some companies required at least a 6 month fixed term lease to be in place or they won't insure.

Crazy stuff and I've never heard of it before myself until today...

The_Morrigan · 11-07-2014 05:17PM

Giles wrote: »

That's what I did before (ignored the agent after quoting the RTA 2004)but now that the insurance issue has reared it's head I don't want to cause an issue for the landlord as we have a very good relationship with her.

It doesn't sound legal or correct to me that an insurance company can refuse insurance on such a basis but I checked with a friend of mine who works in the area of house insurance and he said some companies required at least a 6 month fixed term lease to be in place or they won't insure.

Crazy stuff and I've never heard of it before myself until today...

But if that is the case then the insurance companies are going to cause landlords to ignore the RTA obligations with regards to Part IV tenancies - which is illegal and would end up with the insurance policy voidable.

Selik · 11-07-2014 05:51PM

Yes but if my landlord is put in a position where genuinely she can't insure her house as I won't move to a fixed-term lease then surely this must be illegal?

TheDriver · 11-07-2014 06:02PM

Seriously??? This is total crap. Never heard of a house not being insured unless lease is in,place.

usernamegoes · 11-07-2014 06:16PM

What about signing a 2 month fixed term lease?

Victor · 11-07-2014 10:25PM

It really does sound like bull. Ask for a copy of the policy.

I really suspect it s the banks insisting on sound tenancies or they move to repossess or estate agents looking for commissions.

Now, insurance companies do want properties occupied to control the risk of fire, flooding and vandalism, however it is an issue that can be easily dealt with in a policy. Many of them will allow the property to be vacant for a month before there is a problem. I imagine you will be giving more than a month's notice.

fash · 12-07-2014 04:26AM

Sign a fixed term contract with a tenant may terminate at will clause.

Pawwed Rig · 12-07-2014 06:47AM

The_Morrigan wrote: »

But if that is the case then the insurance companies are going to cause landlords to ignore the RTA obligations with regards to Part IV tenancies - which is illegal and would end up with the insurance policy voidable.

Social welfare did it to force tenants to ignore legal responsibilties so it is not unheard of in this country.
I have landlord insurance and was never questioned about the tenancy other than to ensure there are no long periods of vacancy. I think it is the LL making up reasons why she wants the fixed term lease.

The_Conductor · 12-07-2014 08:44AM

Just playing devils advocate here.
Some insurance companies offer specific insurance packages for landlords who are not living in the property they are insuring. Typically its building only cover- though some have limited contents insurance. In some isolated cases- they have been known to ask landlords for the names and contact details of the tenants, and details of the tenancy- and the landlord may also be obliged to inform the insurance company of any periods of vacancy exceeding 7 calendar days.

These type clauses became more widely used after the harsh winter of 3-4 years ago- when some smaller insurers (who will remain unnamed) were deluged with claims for burst pipes in vacant BTL properties.

It is possible that some remnants of these type clauses are still knocking around- I've certainly seen a few curious ones, one large international underwriter is notorious for adding them to contracts at renewal.

The landlord may be unable/unwilling to sign a lease with a clause like this in it- however- there are other insurers in the market- there is nothing to stop him going with someone else..........

I'm just playing devil's advocate- these type clauses have existed- and are fashionable in the insurance industry from time to time- and have been used against landlord's in the past to refuse claims (in the cases of periods of vacancy being notified to them and complied with to the letter of the law).

You'd be surprised at what some companies have gotten away with.........

athtrasna · 12-07-2014 08:58AM

I would be inclined to tell the agent that you'll happily sign something that says you are on a Part IV tenancy in accordance with the Residential Tenancies Act. This should satisfy the insurance company that a tenancy is in place if they are actually genuinely looking for a lease.

Victor · 12-07-2014 09:15AM

Pawwed Rig wrote: »

Social welfare did it to force tenants to ignore legal responsibilties so it is not unheard of in this country.

What do you mean by this?

odds_on · 12-07-2014 09:16AM

Perhaps the landlord has made a claim against the insurance company for one of the reasons suggested by The_conductor in his post, above, and the insurance company are now insisting that at least a six month tenancy is required.

Say that you will sign a Part 4 tenancy agreement but not a fixed term agreement.

Although the Act states that an insurance must be in place, this is subject to:
(3) The obligation under subsection (1)(c) does not apply at any
particular time during the term of the tenancy concerned if, at that
time, a policy of insurance of the kind referred to in that provision
is not obtainable, or is not obtainable at a reasonable cost, by the
landlord in respect of the dwelling.

Therefore, tell the estate agent that you will remain in the property under a Part 4 tenancy without landlord's insurance, if it is not obtainable by the landlord without the fixed term lease clause.

Landlord's problem, not the tenant's problem.

You, of course should have your own insurance for your property and belongings.

The_Conductor · 12-07-2014 09:19AM

Social Welfare thought they could dictate rent reductions at will- as they choose, to landlords. They got caught out- because housing is seriously in constraint- and landlords have no issue with finding private tenants who are more than willing to pay the market rent- and sign a contract undertaking to do so. With Social Welfare tenants- multiple cuts in rent- were unilaterally dictated to landlords- without warning- via tenants- in breach of contractual obligations under the 2004 Act, and contractual and civil law.

The_Conductor · 12-07-2014 09:24AM

odds_on wrote: »

Therefore, tell the estate agent that you will remain in the property under a Part 4 tenancy without landlord's insurance, if it is not obtainable by the landlord without the fixed term lease clause.

At which point the landlord hands you legitimate notice to quit. Refurbishes the property with a lick of paint- and puts it back on the market to someone who is willing to sign a fixed term lease.........

The issue may or may not be legitimate- but tossing something back at a landlord- such as 'I don't care if you have insurance cover or not, that's your problem'- is not going to solve anything.......

In this instance- I'd suggest the landlord shops around, and finds insurance cover suitable for his or her needs. If the landlord simply wants the property back- use one of the legitimate reasons to issue valid notice, stop playing games.

gaius c · 12-07-2014 11:56AM

fash wrote: »

Sign a fixed term contract with a tenant may terminate at will clause.

This!

Chris_5339762 · 12-07-2014 12:01PM

No, sign a fixed term contract that has a terminate clause of the same durations as the Part 4 allows

The_Conductor · 12-07-2014 12:05PM

Chris_5339762 wrote: »

No, sign a fixed term contract that has a terminate clause of the same durations as the Part 4 allows

Legally- it has to have at least the same terms- any rights have to be in addition to those granted under the Act- and cannot be lesser than those rights.

Selik · 17-07-2014 08:26AM

Thanks for all the replies so far - some interesting ideas in there. Alot might or mightn't work. Something I'm also bearing in mind here is that I have a good relationship with both the agent and the landlord and would like to keep it that way and not become a problem.

I haven't got back to the agent yet but will before the week is out so still mulling over what to say....

MCD. · 17-07-2014 11:14AM

There are usually in occupancy clauses on home/investment property insurance policies (house can not be left unoccupied for more than 40 days or something)

To address this insueres will at the time of inception/quotation a question relating to tenancy agreements in respect of investment property's is asked (ie is there a tenancy agreement in place and for what period of time?) This to limit an insurers exposure to unoccupied properties (and the poor claims experience that tends to go with them)

If at renewal of the policy a Part 4 tenancy has come about there is in effect no tenancy agreement in place for the required amount of time (probably 12 months) and the insueres are not required to offer cover.

If I were a landlord I wouldnt be willing to be without property or liability cover and would try to meet the conditions of my insurance policy.

Selik · 01-08-2014 03:14PM

Ok so after a tiring phonecall with one of the agents yesterday we eventually agreed that we would sign a fixed term lease on condition of a clause referring to part 4. They haven't seen the clause yet but we discussed the content of it - just needs to be approved now. I haven't sent it on yet but before I do does anybody have any useful feedback?

Here it is:

Residential Tenancies Act 2004 (Clause)

This lease agreement is superseded by the terms laid out in a part IV tenancy agreement as per the Residential Tenancies Act 2004, with specific regard to security of tenure and associated notice periods therein.

Thomas D · 01-08-2014 04:17PM

Giles wrote: »

Ok so after a tiring phonecall with one of the agents yesterday we eventually agreed that we would sign a fixed term lease on condition of a clause referring to part 4. They haven't seen the clause yet but we discussed the content of it - just needs to be approved now. I haven't sent it on yet but before I do does anybody have any useful feedback?

Here it is:

Residential Tenancies Act 2004 (Clause)

This lease agreement is superseded by the terms laid out in a part IV tenancy agreement as per the Residential Tenancies Act 2004, with specific regard to security of tenure and associated notice periods therein.

Why bother? Tell them you're not interested in a fixed term and that is that.

The_Morrigan · 01-08-2014 04:23PM

Personally if it were me I'd be doing a schedule to the existing lease noting that you are extending the lease under Part IV rules. No fixed terms then.

Selik · 01-08-2014 04:39PM

I think the clause I'm putting in more or less is the same thing and means if for whatever reason we had to move/leave etc at short notice we can do it and keep the deposit (I might actually ask for a letter to that effect as well, just in case).

I'm not actually bothered signing a fixed term lease per say so this is more out of principle and a quieter life as I've enough on my plate at the moment without dealing with a pestering agent. Very happy in the gaff with my girlfriend and no plans to move out anytime soon....

They simply DON'T get the whole part 4 thing seemingly, incredible as that may sound - and I'm SICK of trying to explain it and why I'm apparently the only tenant they've ever dealt with who refuses to sign a fixed term lease (complete bull I know).

Sigh..... :rolleyes:

The_Morrigan · 01-08-2014 04:44PM

Giles wrote: »

I think the clause I'm putting in more or less is the same thing and means if for whatever reason we had to move/leave etc at short notice we can do it and keep the deposit (I might actually ask for a letter to that effect as well, just in case).

I'm not actually bothered signing a fixed term lease per say so this is more out of principle and a quieter life as I've enough on my plate at the moment without dealing with a pestering agent. Very happy in the gaff with my girlfriend and no plans to move out anytime soon....

They simply DON'T get the whole part 4 thing seemingly, incredible as that may sound - and I'm SICK of trying to explain it and why I'm apparently the only tenant they've ever dealt with who refuses to sign a fixed term lease (complete bull I know).

Sigh..... :rolleyes:

Report their incompetence to the regulator, that's what it's there for.

L1011 · 01-08-2014 04:48PM

Take the lease away to "study it" and send it to the regulator with your complaint as I'm sure they'll be interested in it. They desperately need re-education

The_Morrigan · 01-08-2014 05:11PM

Giles I would be slightly concerned about the new lease you are signing, have you compared it to the existing/previous one? Can you get a track change copy of the lease so you can see any obvious changes that have been made?

fash · 01-08-2014 05:22PM

Your proposed clause does nothing. If you are suggesting that it will allow you to break a fixed term lease- it will not.

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Landlord trying to insist on fixed-term lease as unable to renew insurance otherwise

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