There is a new insurance policy for landlords who face serious financial risks from defaulting tenants.
Landlord Protection Policy, launched by Hollard Insurance Partners, in partnership with Tenrisk Underwriting Managers, will also insure landlords against lost rent and legal procedures.
The insurance guarantees legal fees up to R40 000, handles all legal procedures and evictions, and provides up to three months rent during eviction and one month if a tenant absconds.
Rob Kelly, Hollard's managing director, says: "Hollard has designed a policy that will protect landlords."
Kelly says research reveals that depending on area, type of property and owner profile, 50 percent to 75 percent of leased properties are personally managed by owners and significant numbers of property purchases have been bought to let.
"Horror stories of defaulting tenants who don't vacate have landlords facing the harsh realisation that their monthly rental income streams are no longer secure."
Eddie Schoch, head of Tenrisk Underwriting Managers, estimates leased properties to be about 1,2 million. He says the legal position of landlords was changed in 2002 by the supreme court of appeal.
"Legislation intended to protect the homeless and squatters from evictions was made applicable to ordinary relationships between landlords and tenants. It amended common law remedies available to landlords against defaulting tenants to such an extent that a complicated new court procedure now needs to be followed by landlords to obtain eviction orders."