Landlord guaranteed rent insurance is a phrase that attaches to two very different offers. One is an insurance policy paying arrears. One is a company taking your property on a lease and paying a fixed rent. Reading which one is in front of you takes a minute and changes every question worth asking.
If it is insurance
There will be an insurer, a policy, a schedule and a set of referencing conditions you must meet before the tenancy starts. You remain the landlord and your tenant remains your tenant. The questions are about the period, the excess, the referencing standard and whether legal expenses are included.
If it is a scheme
There will be a company, a term, a fixed monthly payment usually below market rent, and a lease from you to that company. You are no longer letting to an occupier; you are letting to a business that sublets. The questions are about the company's solvency, the repair obligations, what happens at the end of the term and who the occupiers will be.
What both require you to check
Your mortgage and, on a flat, your lease. Many buy to let mortgages and most flat leases restrict subletting, and a guaranteed rent scheme is subletting. A landlord who signs one in breach of either has a problem that no insurance addresses.
Questions people ask about landlord guaranteed rent insurance
How do I tell which is being offered?
Insurance names an insurer and asks you to reference the tenant. A scheme names a company, a term and a fixed rent, and takes the property on a lease.
Is a guaranteed rent scheme risky?
It carries counterparty risk rather than insurance risk: the scheme pays only while the company is solvent and honours the lease.
Do I need permission for a scheme?
Usually. Most buy to let mortgages and most flat leases restrict subletting, and a guaranteed rent arrangement is subletting.