Your Responsibilities
As a Letting Agent under Financial Conduct Authority rules, you are not allowed to sell, arrange or promote insurance to your clients (as you are not regulated to do so). Arranging insurance without proper authorisation could lead to enforcement action being taken by the regulators.
To enable you to purchase a rent guarantee policy in your agency name that your landlords can benefit from you must have insurable interest. This is evidenced by the full management of a property – the minimum requirement being rent collection. This enables you to offer a management service that includes rent and legal protection. Please bear in mind that when marketing the scheme, you cannot give the impression you are offering an insurance product. You must refrain from referring to the cost of the scheme as a ‘premium’ or using the word ‘insurance’. Instead, you are offering your clients a guarantee. The policy must be in your name as letting agent and you must pay the premium.
In terms of the service Alan Boswell Group is providing you (the letting agent), please note this is a non-advised sale and that we only provide rent guarantee insurance from a single provider (Aviva Insurance Limited). Our Terms of Business to you are available here.
To help you position the service, below we explain how it should be described as a ‘contract of guarantee’. By following this process you are able to formalise the arrangement with your client.
Charging the Landlord
You must ensure that any charge needs to form part of your managed service charge and is subject to VAT. There cannot be a direct cost to the landlord for the insurance otherwise this would be a regulated activity and require FCA authorisation.
Such a charge may be levied as follows:
- An increased Management Service % ( i.e 10% for our standard service or 12% for our increased management service including Rent Guarantee)
- A monthly charge of £XX for our Rent Guarantee service
- An annual charge of £XX for our Rent Guarantee service
Largely driven by market forces, the costs for the added benefit of having the guarantee needs to be proportionate and reasonable.
Renewing the Guarantee
You can only renew the guarantee if you are still fully managing the property.
Consequences of not complying with the above guidelines
If you do not comply with the above guidelines, we reserve the right to restrict your access to the portal.
Invoicing and Payments
We send invoices on the 15th day of the month, where an invoice will be generated for the previous months sales e.g. 15th July invoice for June sales.
Invoices will be sent automatically and we provide a variety of payment options, including an automated payment facility for ease. If you wish to sign up for this please visit the following link https://www.alanboswell.com/automated-payment-agreement/.
