It is one of the most important policies for landlords: landlord’s legal protection insurance. Because statistics show that landlords and tenants unfortunately often get into disputes and that these even go all the way to court: just under 10 percent of the lawsuits in civil law in recent years were conducted on rental disputes – the operating costs statement was the subject of the conflict particularly frequently. In most cases, you as the lessor bear at least part of the costs for the negotiation and for the elimination of the cause of the dispute. As this can quickly become expensive, a good landlord’s legal protection makes sense.
Which disputes are covered by the legal protection for landlords?
Many providers of this insurance basically divide their range of services into four legal areas:
- Legal protection for housing and property (WuG)
- Criminal legal protection
- Misdemeanor legal protection
- Tax legal protection
In addition, you can supplement your insurance with other areas such as contract, property and administrative law. A lawyer can explain to you in detail which dispute falls into which area of law. However, the classification of legal areas is less decisive for the decision for or against landlord-tenant legal protection. Much more important are the actual benefits.
The most important benefits of a landlord’s legal protection insurance
Policy benefits are listed in detail in each provider’s policy terms and conditions. For appropriate protection, make sure the following costs are covered:
- Lawyer’s fees, both of your own lawyer and, if applicable, the costs for the lawyer of the opposing side
- fees of the respective court in all instances
- Costs for appraisers, expert opinions and witnesses
- Costs for out-of-court measures to reach an agreement and preserve a normal business relationship, such as mediation or arbitration
- Costs for eviction suits
- Costs of collecting outstanding rent and utility payments through a collection agency
- Expenses incurred when appealing against an official decision even before a lawsuit is filed
A good legal protection insurance for landlords also offers telephone legal advice from specialist lawyers, so that, for example, initial questions can be clarified and options for action can be addressed. In addition, make sure that there is no upper limit for the amount of coverage or that it is high enough so that the sum insured corresponds to the expected value in dispute.
Good to know: If you also want to protect yourself against financial expenses caused by rent nomads, you can also do this by taking out a powerful legal protection insurance for landlords. Some tariffs even cover possible loss of rental income. However, check your other existing insurance policies here – for example, homeowners insurance, which sometimes also takes effect in the event of rent defaults.
The waiting period for legal expenses insurance
As with many insurances, also with conclusion of a landlord legal protection insurance usually a waiting period of three months applies. You can only claim benefits after this period has expired – with a few exceptions: For example, you can usually use the telephone legal advice from the start of the insurance and mediation or arbitration can also be claimed without a waiting period. Some areas of law, for example misdemeanors and criminal law, are also insured without a waiting period. When changing or renewing an existing policy, this period also does not apply.
Basically, with the deadline, insurers want to make sure you don’t take out insurance only when litigation is already inevitable. For this reason, you cannot take out or use landlord’s rights insurance retroactively.
Costs for good landlord’s rights protection
How much you pay for your legal protection depends not only on the specific benefits and insurance cases you choose, but also on other factors:
- Amount of rent: The amount of rent influences the amount in dispute in a case, which in turn is decisive for the lawyer’s fees and court costs.
- Number of residential units: The more apartments you rent out, the more likely you are to get into a legal dispute – accordingly, a policy becomes more expensive as the number of residential units increases.
- Additional space: If you want to include garages, outbuildings or commercial space in your insurance, this will affect the overall costs.
- Deductible: If you bear part of the costs yourself, this has a positive effect on the premium amount.
- Coverage amount: the higher the sum, the more expensive the insurance policy.
Saving tip: Choose an annual transfer instead of a monthly payment to save costs for the policy. Many insurers reward you with savings of up to 10 percent if you commit to a tariff for the long term.By the way, landlord’s rights protection is completely tax-deductible and is reported in the tax return under income-related expenses. If the legal protection for the rental is part of a larger overall insurance, you may claim the expenses, however, only proportionally.