APTs – Insurance and legal cover questions?
I am just coming up to building insurance renewal and fairly happy to stick with the current broker and insurer. My insurer does cover for differing types of tenants, including the standard ‘norm’ of self-funders (private payers), retired, and those on benefits.
The Legal expenses element, though (as part of my building insurance cover and premium), is provided by a third party, ARC. This third party provider has recently decided to amend their cover to state that tenant references must be obtained…
A tenant reference is defined as:
“A credit check against the Tenant and any Guarantor obtained from a licensed credit referencing company showing no County Court Judgments in the past three years and no outstanding County Court Judgments, together with copies of two forms of identification, one of which must contain a photograph, and a written employers’ reference on company letter headed paper confirming their permanent and current employment and that their gross monthly salary is at least a multiple of 2.5 of the Tenant’s Rent. If all of the above are not available or in the case of student Tenants or Tenants receiving any income or housing-related government benefit, a full Tenant Reference showing a Pass on the Tenant and Guarantor must be obtained from Arc’s approved tenant referencing company. Details of these companies are available by referring to the Arc Legal website…
“Where You fail to provide evidence that You successfully completed a Tenant Reference on the Tenant (and Guarantor if required) prior to the start of the Tenancy Agreement or where the Tenancy Agreement started more than 31 days after the Tenant Reference obtained, there is no cover under the policy”.
So it looks like even if your insurer is ok with your tenant ‘type’, the legal provider is now holding court over whether a legal claim is accepted or not.
In this case, is it wise to make sure from the very start (and in the advertising) that applicants are aware of this?
It will certainly cut down on the numbers that may apply (a good thing from a time management perspective), but am I going to make myself open to being accused of rental discrimination if I do?
Many thanks Reluctant
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Commonhold will not be instantly cheaper
Member Since June 2019 - Comments: 932
9:28 PM, 2nd August 2026, About 3 weeks ago
The issue here is that we did not always reference people to the same extent in the past – so if every insurance company now stipulates these requirements they will start to reject a high number of claims.
Member Since October 2020 - Comments: 1317
6:10 PM, 3rd August 2026, About 3 weeks ago
You seem to be assuming that its impossible for any tenant on benefits to pass referencing. What’s the basis of this assumption?
Member Since August 2026 - Comments: 7
8:39 AM, 11th August 2026, About 2 weeks ago
The ARC wording is an alternative route, not a bar. Employer reference at 2.5x if you can get one, full tenant reference with a Pass if you can’t, which is how a student or someone on UC gets referenced at all. Applying that as written isn’t discrimination.
What would land you in trouble is the reason you gave for advertising it. Section 34 bites on a criterion applied in order to make claimants less likely to let, and “I put it up to cut the numbers down” is the sort of thing that gets quoted back at you. Publish the affordability standard by all means. Don’t frame it as a filter.
Member Since September 2018 - Comments: 3710 - Articles: 5
1:03 PM, 11th August 2026, About 2 weeks ago
Reply to the comment left by Paul Essex at 02/08/2026 – 21:28
…which is going to cause major issues as you cant ‘retrospectively’ then get a reference. Nor RGI or a guarantor.
Seems like if many LL’s find this out at the point of seeking possession, again another move to use the selling ground, just to secure eviction?
S21 going was bad enough, to now be replaced by S8 where the grounds still do not reflect the real reason for possession just adds to the problem.
In the event of feeling they have no choice than to list the selling ground, they always make it clear in the S8 the actual reason that prompted this. It would be very telling (and not something that the judge can use against the LL as the ground is not discretionary) if the LL gave reason for selling as ‘overbearing government interference in the private rental market’ or other such reason.