If you’re a property developer in charge of a major construction project that involves building multiple homes for rent, you’ll require a relevant insurance policy.
An insurance policy for a project of this type is called a build-to-rent structural warranty, provided by companies like ABC+ Warranty.
Not sure what a build-to-rent structural warranty is, how it works and its benefits? Continue reading our guide.
Build-to-rent structural warranty explained
Build-to-rent structural warranties are unlike standard structural warranties in that they protect the developers and investors against potential structural defects, while traditional warranties protect the homebuyer.
If a developer or investor isn’t just purchasing a new build or buy-to-let property, they can benefit from a build-to-rent warranty as it offers excellent financial security should a claim need to be made for latent structural defects.
If a developer is searching for investors to back their project, having a build-to-rent structural warranty can be enticing as it offers protection for their investment.
What does a build-to-rent structural warranty cover?
Build-to-rent warranties cover latent structural defects for 10 to 12 years after the registered completion of the construction.
The first two years of coverage are known as the defects insurance period, where the contractor responsible for construction must fix any structural issues discovered.
The structural insurance period runs from that point onwards to the end of the coverage. This is where the warranty provider covers the cost of repairing structural defects instead of the contractor being held liable.
It may also be possible to add further extensions to your build-to-rent coverage, such as protection for builder insolvency and mechanical and electrical defects.
What are the benefits of a build-to-rent for tenants?
Build-to-rent represents several benefits for tenants, such as:
- Appeals to more demographics – Build-to-rent has a target demographic of young professionals aged 25-34, but it’s also beneficial for other demographics, such as families.
- Higher quality facilities – Build-to-rent properties usually have a higher quality of facilities, and they’re maintained regularly.
- Flexible design – Build-to-rent properties are designed to draw in a wider group of demographics, being built to attract working professionals, families or retired people.
- Community-oriented design – The buildings can be designed to have everything under one roof, making spaces for tenants to be able to live, work and relax.
What are the benefits of a build-to-rent for investors?
There are also a variety of benefits for investors interested in properties with a build-to-rent warranty.
These include:
- Long-term investments – Incoming rent combined with increasing house prices makes a build-to-rent scheme an excellent investment opportunity.
- UK-wide opportunities – Build-to-rent offers investors opportunities in cities like Manchester and Birmingham because of good transport links, land value and employment rates.
- Faster delivery to the housing market – Modular rental developments can be created and released to the market much faster than homes.
- Smart technology – Moving forward, property development will adopt digital infrastructure, while smart buildings are essential to reducing energy consumption, offering an enticing opportunity for property investors.
Summary
So, in summary, a build-to-rent structural warranty can provide vital protection for property developers, contractors, investors and residents.
If you’re designing and creating a property to house multiple residents, you must obtain a structural warranty relevant to your project.
You can do so with the help of ABC+ Warranty.