Rental: all you need to know about unpaid rent insurance

Rental: all you need to know about unpaid rent insurance



Unpaid rent insurance or Unpaid Rent Guarantee (GLI) aims to cover non-occupying landlords against problems related to the payment of rent. Optional, it only concerns accommodation rented on a yearly basis.
Picture
Rental: all you need to know about unpaid rent insurance
Optional, the guarantee of unpaid rents can be taken out with the insurance company of your choice. © Kerkez
Summary

    The GLI covers problems related to the payment of rent
    GLI: what are the owner's and tenant's obligations?
    How to activate the Unpaid Rent Guarantee?
    Guarantee of unpaid rents and rental deposit: what are the differences?
    Unpaid rent insurance: how to make the right choice?

The GLI covers problems related to the payment of rent

Optional, unpaid rent insurance, commonly called Guarantee of Unpaid Rents (GLI), takes care of the problems related to the payment of the rent. Aimed at non-occupying owners, it aims to secure their rental income. Concretely, if the tenant stops paying his rent, a compensation process will start. The owner will then be compensated for the amount of the rent for a given period. It should be noted, however, that the GLI only applies to dwellings rented by the year. The houses and apartments offered for seasonal rental are therefore in no way eligible. Depending on the options taken out and the insurance companies, unpaid rent insurance can also cover the procedural costs that will have been incurred for the recovery of unpaid rents, the damage caused by the tenant as well as the periods during which the accommodation will have remained unoccupied. . We then speak of rental deficiency or rental vacancy. Finally, it should be noted that each guarantee is accompanied by compensation conditions which may vary depending on the insurer. It is therefore essential to carefully study the general conditions of the contract before signing it.

The Unpaid Rent Guarantee aims to secure the rental income of non-occupying owners.
GLI: what are the owner's and tenant's obligations?

To take out an Unpaid Rent Guarantee (GLI) and thus benefit from cover in the event of default by the tenant, it is essential to comply with certain conditions. First of all, the accommodation must imperatively constitute the main residence of the tenant. In addition, GLI exclusively protects real estate occupied by solvent tenants. The tenant must, therefore, justify a monthly income representing at least 2.85 times the amount of the rent. The tenant must also have a stable professional situation. It is important to point out that it is the owner's responsibility to verify that his tenant has all the rental guarantees required. To do this, he must ask him for an identity document, his last three payslips, a copy of his employment contract or his employer's certificate. Finally, it should be noted that the amount of the GLI premiums corresponds to a percentage of the rent, including charges.

In the event of an incident, the GLI most often covers unpaid debts over a period of 12 to 24 months.
How to activate the Unpaid Rent Guarantee?

If the tenant in place stops paying his rents, the Unpaid Rent Guarantee (GLI) takes over by paying the landlord the equivalent of the amount of the rent. However, in the event of an incident, the owner must take several steps to be able to be compensated. First, he must send the tenant a reminder letter with acknowledgment of receipt, then a formal notice if he does not get a response within 15 days. If the tenant still does not follow up, the landlord can then have him issue a payment order through a bailiff. If the problem is still not resolved and the situation gets bogged down, the owner can contact their insurance company with a claim form. Finally, it should be noted that the indemnities are not paid as soon as the claim is made. Generally, the owner is compensated within 3 months after the occurrence of the first default. However, the Unpaid Rent Guarantee is retroactive: the owner will ultimately be compensated for all of his unpaid rents.

The deadlines to be respected between each step may vary depending on the insurer.