To have a property in profitability entails a series of managements that it is always advisable to delegate to professionals so that the owner simply limits himself to receive the agreed monthly rent. Sometimes it happens that this management is altered for various reasons: termination of the contract, improvement works, presentation of a claim to the insurance company, modification in the contractual conditions… These managements, can be delegated to professionals who take care of solving them in exchange for a fixed monthly fee. Sometimes, although it is not common, it can happen that your tenant stops paying the rent and does not want to leave the rented property.
When this happens, it is best to first try to find a solution that is acceptable to both parties. However, if you have reached a point where you realize that this situation cannot be resolved amicably, then you may have to take the legal route and you will need to contact a lawyer who specializes in real estate issues and possibly file a lawsuit immediately. If this route fails, then you may have to go further and take the judicial route where you can claim the debt or terminate the contract and request an eviction.
This process, although effective, is usually lengthy and costly for the owner of the property. It will always be the owner who will have the power to decide how to act in such a case.
Take out a home insurance policy
At Orience we always recommend our clients to take out a home insurance policy, so that both the owner of the property and the landlord agree to protect the property against any unforeseen event.
The Spanish insurance market is one of the top 15 in the world. Insurance companies in Spain are regulated by the Directorate General of Insurance and Pension Funds (DGSFP), which reports to the Ministry of Economy and Business. Around 98% of insurance companies in Spain are members of the Spanish Insurance Business Association (UNESPA).
There are different types of home insurance:
Home insurance that covers the building
The owner is interested in taking out insurance that covers the fixed property: its structure, interior and exterior walls, ceilings, floors, attics and kitchen and bathroom installations. The Spanish law (29/1944) of Urban Leases determines that it is the obligation of the lessor to carry out the necessary repairs to maintain the dwelling in habitable conditions, unless these have been caused by the action of the tenant.
Look for coverage that insures against natural catastrophes, fires, floods and defective workmanship.
Home insurance that covers the contents of the home
Insurance that covers only the contents of the home, such as appliances, furniture and other movable items found in the home, is optional. However, if the owner rents a furnished dwelling, it is advisable to take out a home insurance that covers the contents of the dwelling in case of damage not caused by the action of the tenant. It is advisable to inform the insurer that the person who will be residing in the house is not the owner.
Standard plans protect against fire and water damage and usually include electrical damage, theft and vandalism.
Homeowners insurance that covers liability
With liability insurance, damage to third parties is doubly insured. This type of policy protects the homeowner against damage to the home caused by third parties that is not the result of an action by the person residing in the property, such as a short circuit that causes a fire or a faulty faucet that causes a flood. It may cover legal expenses, medical expenses, property replacement expenses and even funeral expenses in the event of a fatal accident.
However, in this case, the tenant also has to take out a policy with civil liability if he does not want to face the costs of damages to third parties as a result of his accidental action. In the event that the tenant does not have this type of insurance and causes damage to third parties, it will be the landlord’s homeowner’s policy that will be responsible for the compensation that can in turn be claimed from the tenant.
Homeowner’s insurance for rental property owners
It is advisable for rental property owners to insure their home to cover the building, its contents and civil liability for peace of mind. It should include coverage against non-payment of rent to guarantee the collection of the agreed monthly payments. This type of insurance is highly recommended because, in the unlikely event of non-payment by the tenant, the home insurance will cover a number of monthly payments, while the landlord starts negotiations with the tenant or takes legal action.
Home Insurance for Renters
Home insurance for renters will provide civil liability coverage against unforeseen events such as theft and accidents while living in a rented space. The policy can also cover the resolution of urgent problems such as a locksmith service. The policy can provide legal assistance for disputes with the landlord such as non-payment of rent or return of the deposit.
Choosing the Right Home Insurance
Here are some things you may want to consider when choosing the right home insurance for your home:
- Cost of annual premium fees
- Amount the company pays out in the event of a claim
- Can they tailor the policy to suit your needs?
- Does the company offer any bonuses, discounts, or incentives?
- Company reputation
- How easy is it to make a claim or cancel a contract?
Orience can help you decide which insurer and type of insurance is best for your needs. Our insurance consultant can present the many different insurance companies and their products, explain their characteristics and their prices and help you with the paperwork and documentation. In this way, the process is simplified and time and money saved.