FCC Paragon, part of the Paragon Advance group of companies, has recorded the highest number of rent warranty claims they have ever had, with just over a third more than this time six months ago.
Kerry-Anne Dowdell runs the credit management department for all FCC Paragon’s warranty products including Debt Recovery, Company Referencing and Paragon Evict and she commented: “Defaulting tenants are a big problem for landlords and letting agents at the moment and the sharp rise in rent warranty claims exemplifies how important it is for landlords to follow proper referencing procedures on their prospective tenants and to ensure they take out adequate rent warranty cover.
“Since the start of the recession, too many landlords would rather pre-empt having to evict a tenant than pay out for “unnecessary warranties” and are cutting corners by opting for the cheapest tenant referencing service they can find. As a result, many are finding themselves out of pocket as tenants who were previously comfortable with their rent are now struggling to meet the payments.
“With rent warranty claims we try to mediate wherever possible in order to resolve the problem and get payments back on track within a few phone calls, endeavouring whenever possible to keep the matter out of court. However, the recent increase in claims has consequently left us processing evictions for a quarter of our live claims.”