Landlord insurance - subletting a room

Hi All,

Can anyone recommend a landlord building and contents insurance policy that allows a tenant to sublet individual rooms?

I have a rental property where the tenant (who resides at the property) leases rooms to students on a short term basis to help her pay the rent.

I have contacted EBM insurance, but they said their insurance has exclusions for where the property is sublet (either in full or by room).

Thanks,
Ben

 

If your tenant rents out rooms on a short term basis while still living there, its highly likely that its not a "sub-let" in a legal sense. The occupiers of these rooms would be under a license to occupy, and are really temporary guests more than anything else.

So it might be your insurance is not affected at all. You would need to have a close look at the wording of your policy and possibly legal advice on the effects.

 

The person I was dealing with at EBM was pretty definite they wouldn't cover it. I guess it comes down to the definition of sub-let vs a guest, especially when they're paying to stay there.

 

Considering it turns on a technical legal definition, an EMB rep's opinion isn't something I'd put much weight on. Most people wouldn't understand what "sub-let" means in a legal sense or that it even has a specific legal definition.

And yes, the definition is important, and has been judicially considered. A good rule of thumb across most of the cases is that if you live in the same house as your lessor, then you are under a licence to occupy and not a lease.

Obviously your own legal advice would apply.

 

I think this is a discussion you need to have with your insurer as it is a grey area - and make sure you get any answer in WRITING if it is a positive response. If it is a sub-let and each room has its own little lease in place, then they may want a separate policy for EACH lease. They also may refuse to cover common areas unless you can prove who caused the damage. If you are upfront with your insurer, you might be able to work out a deal where you pay the landlord insurance, and the tenant pays a different premium to ensure her 'sub let' people are covered. Try Terri Scheer as I know they have a short stay product as well as the typical landlord insurance

 

Not sure if you still require help on this, but I was insured by Comminsure in 2015 and 2016 while I lived in the property and leased rooms to friends/housemates. Their landlord insurance policy covered me for leasing by the room.

It might be worth it to contact other providers and see what they say when it comes to gaining your business.