Before you sign anything
Not by default, and not without being told. A guaranteed rent lease changes how the property is occupied, and a landlord policy that does not know that may not pay when it matters. It is the second question to settle before you sign — the first is your lender — and we would rather you asked both before you spoke to us.
The short version. Tell your insurer that the property will be let to a company on a three-to-five-year lease, and that the company will sub-let it to the people who live there. Use those words. Ask whether the policy covers that, and get the answer in writing. If it does not, ask a broker before you ask us.
Not the guarantee, and not us. A landlord policy is priced on who occupies the property and on what terms. The two specialist brokers whose guidance this page draws on both say that standard landlord policies assume a direct tenancy between the landlord and the occupier — Falcon Insurance puts it at “approximately 90%” of them — and that sub-letting on such a policy “will usually void” it. GPS Insurance Brokers say the same, and that failing to tell the insurer “could invalidate the cover”.
A guaranteed rent lease is exactly that arrangement. We take a lease of your property and place the occupier ourselves, so the people living there have their agreement with us, not with you. To an insurer that is a company let with sub-letting, whatever it is called on the front of the contract.
The consequence of not saying so is not a fine. It is a claim that is refused after the fire or the escape of water, when the loss adjuster reads the tenancy and finds a company where the policy expected a person. Disclosure is yours to make, before you sign, and it is the whole of what this page asks you to do.
The NRLA notes that insurers ask about occupant type and want to be told when it changes. A company let is a change of that kind. These are the questions that get a straight answer.
This is the arrangement, in the words an underwriter uses. We take a lease of the property and place the occupier ourselves. To an insurer that is a company let with sub-letting, and whether the policy covers it is a question about the policy, not about us.
Two specialist brokers we have read say that on a standard landlord policy it usually does not, and that sub-letting without telling the insurer will usually void the cover. Yours may differ. The only way to know is to ask, and the only answer that counts is a written one.
Insurers ask about occupant type — working, retired, on benefits, students — and price and accept on it. Under a lease the occupier is chosen by us, so tell the insurer that, and ask what they need from us. We will answer whatever they ask.
Under our lease you remain responsible for the building and for buildings insurance, so the policy stays in your name. Say the lease runs three to five years; some insurers want to know the term as well as the arrangement.
If the answer is yes, ask for the policy to be endorsed or for a letter saying the arrangement is covered, and keep it with the schedule. A yes on the phone is not something you can show a loss adjuster.
It is a common answer and not the end of the question. Some insurers decline company lets outright; others accept with an endorsement and a different premium; and there are brokers who place policies written for sub-let and company-let properties. Whatever the new premium is, it belongs in the comparison before you decide — a guarantee that costs more in cover than it saves in voids is not one to take.
This page explains what insurers tend to object to and what to ask. It does not tell you what your policy covers, what you are obliged to disclose, or what an insurer can do if something was not disclosed — those are questions of your policy wording and of insurance law, and this site does not paraphrase either from memory.
Your insurer is the authority on your policy. A broker can tell you which insurers write this kind of cover before you need it. How to check that a broker is who they say they are.
Ask before assuming it does. A guaranteed rent lease is a company let in which the company places the occupier — to an insurer, that is sub-letting. Specialist brokers say most standard landlord policies are written on the assumption of a direct tenancy with the occupier and that sub-letting will usually void the cover unless the insurer has agreed to it. Tell your insurer, in those words, before you sign, and get the answer in writing.
The risk is that a claim is refused. The brokers we have read say failing to tell the insurer about sub-letting could invalidate the cover, which would leave the landlord carrying repair costs and liability after a fire, a flood or an injury. Whether that happens in a given case depends on the policy and the facts; the way to make it not matter is to disclose first.
No. Rent guarantee insurance is a policy a landlord buys that pays out if their own tenant stops paying. A guaranteed rent scheme is a lease to a company that pays the rent itself and finds the occupier. Searching for one returns pages about the other, which is part of why this question is hard to get answered.
Under our lease the owner keeps responsibility for the building and for buildings insurance. Ask us what cover we hold for our own liability and for the contents we place, and ask your insurer whether they want to see it. What matters to them is that the building is insured by a policy that knows how the property is being used.
Some insurers decline company lets and sub-letting outright; others accept with an endorsement and a change to the premium; and there are brokers who place cover written specifically for sub-let and company-let properties. A no from your current insurer is a reason to ask a broker, not a reason to sign anyway. Whatever the premium, put it into the comparison before you decide.
Yes. There is no exclusivity and nothing to pay before you sign, so there is nothing lost by asking your insurer and your lender first. If either says no, you have found out for the price of an email.
There is no exclusivity, nothing to pay before you sign, and no reason to hurry. Your lender first, your insurer second, then us. If either says no, you will have found out for the price of an email — and we would rather that than a lease your cover did not know about.
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