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If you rent a property to a family member, it’s tempting to be relaxed about the paperwork. After all, it’s not like renting to a stranger, is it? Well, yes, it is – or at least it should be.
It’s common for landlords to let their properties to family members. But most experts would still recommend you have a tenancy agreement of some kind. It may be tempting not to bother, but things can, and do, go wrong in family situations. There can be a lot of politics, with money lying at the heart of most squabbles. A tenancy agreement will make both of your obligations as landlord and tenant absolutely clear, which will help avoid arguments down the line.
Regardless of who your tenant is, it makes sense to get proper landlord insurance cover and rental protection. In some ways, landlord insurance is very similar to regular home insurance. For example, the buildings insurance aspect will be standard. But a regular home insurance policy won’t cover you for liability – if your tenant hurts themselves in an accident, for instance. Or for legal cover in the event of disputes or unpaid rent. These both come as an option with landlord insurance.
Landlord insurance can cover you for:
While you’d hope you wouldn’t need any of these when letting to a family member, the fact is you never know so you should consider insurance.
There are still a few things the Mortgage Advice Bureau advises you to look out for. Such as:
You still have responsibilities as a landlord, even if your tenants are family. That means you can’t ask them to overlook issues with the property in exchange for cheap rent. But being a landlord remains a great way to make money – last year UK tenants paid out a record £51.6 billion in rent.
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