Let your property to the Council for Emergency Accommodation?

I used to work in a LA homelessness department and we often placed homeless people into emergency accommodation provided by a private landlord. This was on a "nightly paid" basis where the landlord invoiced the council direct, in much the same way as a hotel or B&B would do. The Council paid a premium to have the rooms available, as in effect the landlord could not let the rooms to anyone else (as you cannot have some rooms in the same property let direct to tenants while others are emergency accommodation let to the Council). As the council was the "customer", all damages were payable by the council. The people placed in the rooms by the council were placed there under the statutory homelessness provisions so had no tenancy, just a daily permission to occupy (excluded from the Protection from Eviction Act 1977), so the council could move/evict them immediately.

This type of "nightly paid" placements where the council is the customer, is very different to the situation that other respondents to the post seem to be referring to, whereby the council either:
a) leases the properties long term (and sub-lets the properties), or
b) they simply refer their homeless clients to the properties, but the tenancies are between the owner landlord and the tenants, (which sounds like the situation you refer to in your original post?).

Both the nightly paid, and the leasing arrangements, can work well for the owner landlord, providing it is very clear in the legal agreements as to who is responsible for what.

However, the far more common arrangement of the council simply nominating homeless people to the landlord's vacant properties can be disastrous, as the legal agreements are then between the landlord and tenant, so in effect the landlord has accepted a very high risk tenant but has no legal protections in place for if the tenant doesn't pay the rent or if they damage the property. or cause anti-social behaviour etc.

Before you even consider this, ask your insurer for a quote. They will decline. I can tell you I looked at every residential insurer and no one covers temporary accommodation.
It’s possible to find commercial insurance, but you’ll need to look hard.
If you are a leaseholder, you have no chance.
Most temporary accommodation providers have no idea they are uninsured. It’s only the professional providers with large properties who will have insurance.
If anyone on here is providing temporary accommodation I suggest you look at your insurance very quickly.
The broker and letting agents don’t care, if your house burns down, they will just say ‘oh dear’ and move on.

We have been leasing flats and houses to two of our local councils (in Wales) successfully for the last 15 years. They are used for providing temporary accommodation for people deemed homeless.
A non-secure tenancy between the council and the tenant is used and tenants stay for anything from 6 weeks to a year for example.
The lease between us and the council clearly states the council is responsible for managing the tenants and for any tenant damage and includes a 6 month notice clause for each party. We are responsible for the building’s structure, insurance , 24/7 callout for the boiler and shower and the annual gas check.
The tenancies are managed by a temporary accommodation team of the council so there is no extra management company in the loop. When a lease has ended any property returned to us has been refurbished less wear and tear (though the gardens always need some tlc). We meet a temporary accommodation officer of the council at the property being returned and agree a checklist of the condition of the property.
The lease rates are based on LHA rates for the area less 10% management charge, insurance for the houses costs more for this type of tenant (we use CIA Insurance) and 24/7 boiler cover costs are another consideration. We accept these extra costs for the advantage of no void periods and no requirement on us to manage tenants.
For 23 properties leased for 14 years we have made only two insurance claims each due to fire damage. Both properties were flats so the claims were made on the block policy of the housing associations who are the freeholders. The claims did not affect any policies on our houses.
The main hassle is always access to get the annual gas check done. One council we deal with choose to evict a tenant who refuses access so we have to wait a number of weeks, the other provides access themselves. Either way we document our attempts in case a check ends up overdue.
Hope this helps.

Reply to the comment left by Julie Kirby at 19/04/2021 - 07:44
Have you made the freeholder aware you are using for “temporary accommodation” (TA) , have they advised the insurer this is the case, finally have you seen the policy with the special conditions?
I very much doubt you have, therefore you have inadvertently invalidated the insurance for the whole block. You might have got a couple of small claims through, but a bigger claim would entail a fuller investigation which might have different results.
If I am wrong, please advise who the insurer is, as finding insurers for TA is almost impossible?
Sorry if my post is a bit direct, I’m not trying to catch you out, but a lot of new TA providers are blind to insurance, once you start investigating this properly, you’ll see unless you own the freehold and the property is commercial, you’ll find it almost impossible to get insurance.
I tried a lot of brokers, even Hamilton Fraser could not find a single insurer.

Reply to the comment left by michaelwgroves at 24/04/2021 - 08:48
Yes the two different housing association freeholders are aware of the TA use. We assumed their insurance was adequate and only checked the summary sheet sent out annually by the freeholders. However as I said in my previous comment, in the past we have made one claim on each block policy. One of our claims was with Zurich and I can’t remember the other insurer as our second claim was years ago. Each claim was for about £6000 at the time due to fire damage, one criminal, one accidental.
Our leased freehold houses are currently insured by Abacus via Hamilton Fraser and the occupancy details on the policy include the line “Lease agreement is between Freeholder or their Agent and Council/Housing Authority for 6 months or over”. I have checked with Hamilton Fraser today who confirmed they have continued to cover us as long standing customers but no longer offer this type of insurance. We have in the past also used CIA Insurance who found us cover with Towergate if that helps.

One thing I forgot to mention is that the lease required evidence of permission from the mortgage companies. One mortgage company approved the draft lease agreement with one extra condition required and one refused.

Reply to the comment left by Julie Kirby at 26/04/2021 - 14:53
It's good that you have completed some due diligence. But I'm still doubtful you have insurance. You should clarify so you know for sure.
Leasing to the council, who then sublet, is very different to temporary accomodation (TA).
If the council give all their tenants an AST, you are probably fine. But that's not temporary accomodation. People in temporary accomodation are guests, it is not a sublet, as they do not have an AST.
I'm amazed you got any high street lender to approve lending for temporary accomodation.
As always, the devil is in the detail, are you sure your properties being used for TA, or is the council simply subletting?

Reply to the comment left by michaelwgroves at 26/04/2021 - 17:17
Please see my first comment where I noted the council use non secure tenancies. They are definitely not ASTs. However I have never been a party to the paperwork between the council and their tenants housed in our properties and the council officers have always used the term 'temporary accommodation'. Thank you for your concern but we are confident of our insurance. I hope the details I've provided are of use to someone.