UK Landlord Forum / Life

Hi everyone.

I have 2 BTLs as a sole trader.  Have looked at being a LTD but been advised that wouldn't make financial sense for me at present.  One of the reasons I wanted the LTD is to limit my liability.  It's not that I am doing anything wrong, it's just the more I read into the topic the more the scaremongering about 'they can come after your home!' gets to me. How do other sole traders deal with this? I've got landlord legal insurance.  Next tenants I'll be getting rent guarantee insurance.  I do my own management of the properties. Someone suggested getting a management company in to run the properties as they would have to accept liability if any mistakes were made on their part.  However I have read on the forum of some awful mistakes that letting agents have made and the landlord has been left to pick up the pieces. I guess I'm just another landlord running scared at the mo which is doing my head in, as I thought I'd be in it for the long haul. 

Thanks for reading.

I can fully understand the sense of insecurity.However I can't think of any reason why setting up a Ltd.company would help you much.It will increase your admin.time and accountancy fees for sure.I don't have any form of insurance now other than that required by law.You never know if you are insured until you try to make a claim.I think the biggest safeguard for a landlord is being prepared to turn away a tenant who has any black marks against them,or one where you simply have a gut feeling.The idea that paying a management company will protect you is just laughable.   

How could "they" come after "your home"?
You could, in theory, make a decision that costs you a huge amount of money, and, if your only asset is your home, it might be where you have to find the money to pay there.
But that could happen if you knock someone over in a car or on a pavement somewhere.

All businesses have some risks if you do it badly.

Check the professional liability cover on your insurance, you're probably better off than most people.

Thanks Heavykarma and jpkeates for your replies.  I will double check public liability amounts on my insurance.  I thought the same about using a letting agent.  I've only ever used one once previously and they failed to notice that the tenants said they had a cat.  At the time I had a no pet policy!

I think I would be double checking that the agent was doing everything they should, which defeats the purpose! I find OpenRent has worked fine for the last few years to find, onboard and manage paperwork etc.

Thanks

Quote from: Goldendrummer on December 05, 2022, 10:02:48 PM
...it's just the more I read into the topic the more the scaremongering about 'they can come after your home!' gets to me.

- You haven't made any statement about the nature of the risks over which you wish to limit your liability.

- What specifically is the "scaremongering" you are reading about that is getting to you?

- In what way does this scaremongering suggest that they "can come after your home"?

Until you can articulate these clearly, you cannot know whether any course of action you take will mitigate the risks or limit your liability, and advice such as provided by HK and JPK can only be general in nature.

Thanks Handyman for your reply.  I guess you've hid the nail on the head here (excuse the pun!) I haven't articulated clearly what I want to limit liability from. I've allowed myself to become bogged down with scaremonger stories and fear of losing my own home. However when you've prompted what am I actually  trying to limit liability from I guess it was the unknown.  These scaremonger stories don't actually say anything specific other than a general 'if you do anything wrong etc they can take your house'. I think I kept thinking that there was something I was missing or I had a fear I was doing something wrong. The reality is that I've got everything covered that I can. I'm a good landlord and follow all the laws and guidance and provide good homes for tenants.  I think I just needed to get a grip and put things into perspective, which people's replies here have helped me to do.  I feel much better now.  I've been a landlord for 6 years and this is my first mega wobble over the responsibility.

Thanks again everyone.

The thing about anxiety is that it does not need a specific cause.It's often just a general feeling of fear and vulnerability.The media of course do a great job of making people scared.I don't go in for long-term planning,I am far too fatalistic.However,the general idea that one day I would sell the rentals and have a nice bit of money to keep me in comfort has taken a blow.When I started out over 20 years ago CGT tapered off after the first 10 years or so.That made it a good  investment,with capital appreciation to look forward to. Now I am wondering if I am still going to be a landlord until I drop off the twig. I don't know a landlord who is not feeling very insecure,as the govt.seems intent on driving us out of business.Let's just hope that they get cracking with more social housing for the tenants who will end up homeless.

Well put Heavykarma.  Thank you for your reply.