New insurance to cover property deposits
Residential tenants pay 35%, insurance guarantees the rest.
Just Finance has announced the details of insurance aimed at helping landlords with troublesome tenants. Here are the details:
In the current economic conditions, a few landlords might be forgiven for wondering if they will receive their monthly rentals from financially strained tenants.
With the recession resulting in cut-backs, downsizing and retrenchments, it is not surprising that landlords - especially those with poorly vetted tenants - are struggling to collect rent.
Recent statistics have shown worrying trends. It seems as of the number of residential property tenants not paying their rent has increased to a startling 19% in the first quarter of this year from 14% in the previous quarter. Fourteen percent of tenants are paying late and 10% of tenants are only making part payments.
With this sort of economic climate, it is imperative that letting agencies adapt and implement measures which ensure that landlords receive their rent on time.
Just Finance - a division of the Just property Group - has done just that, by creating two products for Just Letting, one which guarantees a landlord's rent, and another which allows a tenant to pay only a 35% deposit on a rental property.
Called Rentsecure, the product is our rental guarantee to landlords, whereby a landlord's rental is guaranteed against a defaulting tenant. "If a tenant defaults, the landlord will still be paid his monthly rental until the tenant is evicted, plus one additional month's rent thereafter," explained John Roberts, CEO of the Just Property Group, holding company of Just Letting.
Thereafter, Just Letting will endeavour to replace the tenant.
According to Roberts, even the legal fees for the eviction process will be paid on behalf of the landlord - up to a total claim of R200 000.
On top of this, an additional amount of up to 35% of the monthly rental will be paid to the landlord to repair any damages - should there be any.
Rentsecure also provides a high level of scrutiny in the vetting process to guarantee accurate creditworthiness of potential tenants. This is based on the rental amount and not the deposit.
"We are really taking care of the landlord's needs," said Roberts.
However, tenants are also feeling the bite of the recession and many cannot afford to raise a full month's rent as a deposit on a property.
To solve this problem, Just Finance created Depositsaver, which allows a tenant to pay only a 35% deposit on a rental property.
On termination of the lease, the tenant will be refunded his 35% deposit as well as the interest he has earned on this amount, provided there are no damages claimed by the landlord.
In addition, the Just Property Group has secured preferential rates on furniture removals as well as short-term insurance to assist the tenant even further.
"We are really doing our best to ensure that landlords and tenants are helped as much as possible in leasing and renting properties," said Roberts.
"We want South Africans to know that despite the recession, Just Letting can guarantee on time rental payments...whether or not the tenant defaults," he said.
Article from: www.realestateweb.co.za