One of the main concerns landlords have when renting out their property is being unable to collect rent, especially at a time of constant uncertainty caused by the pandemic.
Rent default insurance policies don’t only cover non-payment of rent but also damages to the property caused by tenants, theft or self defence.
The following provides some recommendations to consider before taking out such policies:
- Select a reputable insurance company recognised by the Dirección General de Seguros. (ask the insurer for this certificate).
- Cover has to be for a minimum of one year in consideration of the duration of a possible eviction process.
- Ensure that the policy specifies whether you are renting on a long-term, seasonal or tourist basis, as policy conditions change.
- Carry out solvency checks on the tenants (payslip, income statements, guarantors).
- This insurance can only be taken out and paid for by owners, not tenants.
- Carefully review the cover the policy offers. It is best to consult an expert (insurance agent or broker) or your lawyer.
- Specify the characteristics of the property and take photographs and inventories (attach to the contract).