For property owners - has anyone bought assurance loyers impaye?

[cafe10]

Hello,

I've just bought an apartment in France which I will be renovating and then plan to rent out to a tenant. As I'll be paying a mortgage on the place, I'm hoping the monthly rent will be able to cover my monthly mortgage payment to the bank. For months when the place is not being rented out or when I can't find a renter, someone suggested to me to buy an assurance loyers impaye. Does any France property owner here have experience with buying this insurance? Do you recommend it? Is it useful and effective? About how much does it cost? Is there a specific assurance loyers impaye that you suggest (which company)?

Look forward to hearing from you and best regards,

Cafe 10

[NormanH]

I think you will find it only covers unpaid rent while you have a tenant, not the periods "when the place is not being rented out or when I can't find a renter'.

Once the tenant has given notice and left you have no income till you find another one.

[EuroTrash]

"Impayé" means unpaid. As Norman says, this insurance is to cover tenants who default on their payments.

I trust you have looked into French rental law. If you have, you'll know how difficult it is to evict a tenant even if they do stop paying. Tenants have a lot of protection and It can take literally years to get them out. In order to evict them you have to follow a strict procedure and timescale, and you can't evict them during the winter months. Experienced defaulters know exactly what month to stop paying rent for it to be just too late for you to get them out before winter starts, because then you won't be able to start procedures until the following spring. That's a year's rent, and if something goes wrong with the eviction process the following year it can happen all over again. Hence why a lot of landlords do take out this insurance.

It will mean that the insurance company will vet every tenant to make sure they meet the criteria - usually they have to have a permanent employment contract with a French company, earning at least three times the rent. If they don't meet the criteria then the insurance won't cover them. So in a way it will limit your choice of tenant, but at the same time, you wouldn't want to be taking sub prime tenants in any case if you're relying on them to pay the mortgage.

[cafe10]

Thanks for that clarification Norman, it's good to know.

[cafe10]

[quote user="EuroTrash"]"Impayé" means unpaid. As Norman says, this insurance is to cover tenants who default on their payments.

I trust you have looked into French rental law. If you have, you'll know how difficult it is to evict a tenant even if they do stop paying. [/quote]

Thanks for letting me know Euro Trash. I had heard vaguely that tenants were protect in France, but wasn't familiar with to what extent. Definitely important to be aware of this.

[sandre]

Landlords recommend Flatlooker to list their rental property in Paris and manage it as well. Their complete online rental agency service includes guaranteed unpaid rent insurance for landlords (garantie loyers impayé), so landlords don't have to purchase additional insurance. Flatlooker does an exceptional job when it comes to finding responsible tenants, which is extremely helpful and allows the apartment to always stay occupied. Their services cater to any homeowner who is thinking about listing their rental property in Paris due to their responsive and effective services.

[Ruth Wood FPN Assistant Editor]

Hello cafe10,

I'm the assistant editor of French Property News magazine, part of the CompleteFrance.com team.

As this question rarely comes up, I took the liberty of putting it to one of the insurance experts who write for us. Her reply is below. I hope it's useful.

We would like to use this on our Q&A pages in the next edition of French Property News. Would you be happy for us to use your name under your question? If not, that's totally fine; we can just put 'name supplied'.

Paulette Booth, a manager at Agence Axa International (axa-in-france.fr) replies:

When you are the landlord of a rental property in France you must make sure you have the appropriate insurance on the property. This insurance is known as PNO (Propriétaire Non¬Occupant). This insurance will cover the main risks like fire, storm damage, escape of water, vandalism etc, plus public liability. If you are renting out the property as furnished you can also include the furniture in the policy. Your tenant must also take a policy called MRH (Multi Risque Habitation), regardless of if they want to insure their own belongings/contents or not. This is because, under agreements between insurers in France, certain claims are shared between the landlord’s and the tenant’s insurance. It also means they have liability insurance which is automatically included in an MRH contract.

It is also advisable to take a legal protection policy. This not only helps you to take any legal action that may become necessary; you can ask advice about rental contracts, giving notice etc. You can also send a copy of the contract (bail) to the legal protection company for them to check it over for you.

Assurance loyers impayés is available in France. This type of policy will cover things like unpaid rent and charges, and damage to the property by the tenant. It doesn’t cover the payment of rent to you for any periods when the property is unoccupied and can’t find a tenant. This policy will protect you if you have a tenant who suddenly stops paying, including legal fees if you need to take legal action against the tenant. The cost of the policy depends on the rent you charge/want cover for and your property type, rather than a set premium etc for an off-the-shelf policy.

[NormanH]

Assurance loyers impayés is available in France. This type of policy

will cover things like unpaid rent and charges, and damage to the

property by the tenant. It doesn’t cover the payment of rent to you for

any periods when the property is unoccupied and can’t find a tenant.

That's what I said[:D]

[idun]

Locataires are protected by the treve hivernale, from the 1st of November and 31st of March, cannot get them out, whether they pay or not.

edit I realise that if you took out insurance for non payment, it would be covered, but, you would still have people in who did not care..... so bear that in mind.