• You sell a property with a sitting tenant
• The new owner does not insure the premises or does not insure properly
• There is a major fire, flood or other catastrophe
• Who is liable to pay for the damage?
The answer is – YOU.
Yes, even if you no longer own the property, if you sold it with a sitting tenant, you are still liable for as long as the tenancy agreement has to run.
Not only would you be liable for repairs but you could also be liable for providing alternative accommodation for the tenant.
This is called Privity of Contract and is a real danger for property Investors.
A Property Owner with long-term tenants sold the property to raise funds for future purchases. After 10 months, a fire destroyed the property. The new owner had not insured the property and the responsibility for rebuilding the property fell upon the original Property Owner who had sold the building. It was held that he had that responsibility until the end of the tenant’s original lease. His Property Owners Insurance policy would not pay out and he was forced to sell his other properties in order to meet the rebuilding costs and legal fees. Because the courts required that the payment should be made quickly, the sale of the other properties did not raise sufficient to meet the rebuilding costs plus legal fees and he was forced to extend the mortgage on his own home to the maximum.
The pininsurance Superior Cover Scheme gives this cover up to a maximum of £2 Million.
If the investor had insured with the pininsurance superior scheme he would have been protected and he would not have been forced in to serious financial difficulty.
BE AWARE – not all insurance companies give that cover. Can you afford not to have it?
Ring Tom Steele on 08000 521742
Or visit www.pininsurance.co.uk