Blog Question on insuring outgoings # 1

For Rent Red 3D Realistic Paper Speech BubbleI have had two questions this week on the insurance of outgoings. I share my answer to Question 1 today and Question 2 to follow in the coming days along with a bit of an outpouring of concern I have at present:

Question 1.

Hi Allan, hoping you can help me,

I know you have addressed previously the need for a landlord to include outgoings when setting the gross rental figure in the business interruption section.  Should this only be included when the tenant pays the outgoings as per the lease, or should it also be included if the landlord pays these outgoings (albeit rare).  In the later example, it is an expense of the landlord, however does this make any difference.

Regards Andy [surname and email provided]

Answer 1.

If it is an expense that the landlord meets themselves out of their rental income for the property, it is already included in the gross rentals paid by the tenant and so you do not need to add it again.

What is an outgoing that is clearly not being included in the landlords gross rental is the cost of the insurance on the building which should be added to the gross rentals as if the tenant exits the lease the landlord will now be up for it.


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