The average eviction will cost a landlord about $10,000 and 40 hours of work. NaborlyShield gives landlords peace of mind knowing that they will never miss a rental payment or have to go through the eviction process.
What is NaborlyShield?
Naborly offers NaborlyShield to landlords, agents and property managers who want to eliminate the risk of the cost, time and stress associated with an eviction. After you get a Naborly Report back, you will see a NaborlyShield Quote that is correlated to a tenant’s Naborly Score.
If you decide to purchase NaborlyShield and your tenant defaults on rent, you just need to email Naborly and Naborly will pay you rent for up to 6 months, cover property damage, and give you 1 month’s rent to re-lease the unit while processing the entire eviction on your behalf.
Why should I purchase NaborlyShield?
The average eviction costs about $10,000 plus 40 hours of work between filing and serving documents, and appearing before the Landlord and Tenant board. More than 50% of evictions occur not because a tenant wasn’t screened properly, but rather, a tenant’s circumstances changed after moving into the property, like losing their job, having to unexpectedly repair their car, etc.
If you want to have the peace of mind that you will never have to go through the stress, time and cost of an eviction, NaborlyShield is right for you.
How do I purchase NaborlyShield?
Click on the “View NaborlyShield” button beside a completed report on your application dashboard. Your tenant must have been screened by Naborly before you can purchase NaborlyShield.
What does NaborlyShield cover?
NaborlyShield protects landlords from tenants defaulting on rent or not giving required notice before vacating the property. Typically, if a tenant doesn’t pay their rent, a landlord will have to navigate the eviction process through the Landlord and Tenant board. When you purchase NaborlyShield, you will receive from Naborly:
- 6 months of Rental Income Coverage: If a tenant becomes delinquent on rent payment or vacates before the term of the lease, we will pay you the rent within 24 hours. We will continue to pay you the rent for up to 6 months until you get a new tenant.
- Eviction Coverage: If an eviction is required due to a delinquency or non-payment of rent, Naborly will coordinate the eviction process while covering the legal and administrative costs up to $2500
- Re-marketing coverage: In the case of a delinquency or early vacancy, Naborly will cover the cost related to getting your rental property re-occupied
- Property Damage Protection: In the event that your tenant causes intentional property damage related to an eviction or early move-out, Naborly will reimburse you up to a maximum of $2,000 to cover those expenses.
Does this mean that if a Tenant is qualified for NaborlyShield and purchases it, we can choose not to accept Security Deposit, since NaborlyShield covers up to $2,000 in damages?
Yes, that is correct. To clarify, Naborly will only cover up to $2,000 of property damage in the event the tenant defaults on rent, or for early move-outs without proper notice. 95% of the time that a security deposit is used and it is used to cover defaulted rent, which NaborlyShield covers. In the event that the tenant does not default on rent and causes property damage, you would be looking to the tenant's content and liability insurance to cover or your clients homeowners insurance.
- Does tenant need to have any additional insurance for this?
You will still want to require the tenant to purchase content and liability insurance as you always have.
- How are damages determined?
The language outlined in the NaborlyShield contract stipulates that Naborly will reimburse the landlord/Property manager for up to $2000 in property damage and property damage is determined to be anything above typical wear and tear to the property. Property damage is outlined in section 2.1 (Lease Protection Obligations).
What is the average cost of NaborlyShield?
The average cost of NaborlyShield is approximately 3% of the monthly rent and varies depending on the tenant’s Naborly score. The higher the Naborly score, the lower the monthly fee and vice versa.
How do I submit a claim to Naborly if my tenant defaults on rent or does not give the required notice before vacating the property?
In the event that your tenant defaults on rent or does not give required notice before vacating the property, simply press the Submit Claim button within your tenant's Naborly Report, and fill out the claim form with all the required information.
Where are the claim forms located? Can I have a copy of it to review?
In the event your tenant defaults on rent, you (or whomever deals with defaults) will send an email to email@example.com notifying us. They will respond immediately with the questions that are in the attached form.
Once I submit a claim to Naborly, what is the process?
You will receive an email back from Naborly with a NaborlyShield Obligations Claim Form to complete. Once this is submitted back from Naborly, you will receive payment within 24 hours equivalent to 1 month’s rent and the outstanding monthly payments owed to Naborly.
How does Naborly pay us in case of a tenant's default?
We transfer the money to your bank account via ACH payment. All we require is bank name, account holder name and account number.
In terms of a payment plan for the 6 months of coverage promised in the contract, we will transfer your the first month of defaulted rent within 24 hours of a claims submission to us. If rent default continues, we will continue to transfer you the rent that is owed on or shortly after the monthly due date of the rent. We will contact you on a monthly basis to follow up on the status of the rental payments.
- How do I let you know that we have attained a new tenant before the full 6 months of NaborlyShield Coverage? How do we notify you to stop paying us the rental amount?
If Naborly successfully evicts the tenant we will continue to pay the rent until you have found a replacement tenant. If you find a new tenant on month 3, we will stop making payment under the NaborlyShield after you find the new tenant. Please see section 1.3 (Landlord Obligations) of the NaborlyShield contract.
- What if the tenant who defaulted on rent, pays me back and stays in the property?
If a tenant catches up on missed rent, you are required to pay Naborly back for the money that we covered within 15 days of the tenant paying you (See 1.3.9 in attached NaborlyShield contract).
Are there any exclusions?
- Evictions that are for reasons other than non-payment of rent (damages to property or other tenants, illegal acts on property, landlord moving into property, etc.)
- Roommates that a landlord has not purchased NaborlyShield on
- Death of tenant
- Losses covered by other insurance (property damage that would be covered by their homeowner’s insurance)
- Tenant withholding rent due to the landlord's breach of the lease (landlord has not maintained a habitable environment as per the lease)
- Claims within the first 28 days of purchasing NaborlyShield
As part of our coverage Naborly will take over the file and proceed with the eviction process and the associated costs for it. So what will be my obligations to you be as the landlord?
We will need to you notify us when the tenant defaults on rent, answer the questions in the form attached to our response email, and submit the documents outlined in the attached form. Beyond that we would like to involve you as little as possible in the eviction process so you can focus on running the other parts of your business.
That being said, throughout an eviction proceeding our paralegal may require documents, information and on occasion an appearance at the RTB for the eviction case. In the claims that we have had to date, not more than a few emails have been required of the property manager/landlord. Eviction services is outlined in section 2.1 (Lease Protection Obligations)
If my tenant defaults on rent and I make a claim to Naborly, will Naborly immediately begin the eviction process?
No. Naborly will first contact the tenant to understand their situation and determine the best path forward. It is common for tenants to default on rent due to an unexpected expense or loss of employment income. In these situations, evictions can often cause a downward spiral of poverty for tenants who take high interest loans from predatory lenders or have to pull together another 2 months of rent to move into a new rental.
If Naborly determines it to be feasible, a loan will be offered to the tenant allowing them to get back on track for the next month’s rent. This benefits the tenant but also the landlord, who avoids the hassle of an eviction for a tenant who has only had a temporary financial setback.
If I have three roommates applying to my property, do I purchase NaborlyShield for each of them individually?
Yes. Each individual requires a separate NaborlyShield plan.
If Naborly has to evict my tenant, do I need to be involved in the process at all?
Naborly will require your signature on eviction documents, may need to collect information from you, and/or have you appear in front of the rental/landlord/tenant board to process the eviction.
Will I have to re-lease my property once Naborly has evicted the tenant or does Naborly do this?
Naborly does not re-lease your property once an eviction has been executed; however, we provide up to 1 month’s rent to cover this cost. Most landlords hire a real estate agent to release their rental. A real estate agent’s fee is 1 month’s rent so Naborly will reimburse you for this cost.
Do all tenants I screen qualify for me to purchase NaborlyShield?
No. Naborly does not offer NaborlyShield if one of the following is true:
- If the Tenant’s Cash Flow (Rent-To-Income + Debt-To-Income + Basic-Living-Expense-To-Income) is greater than 120% of their share of rent
- If the Tenant’s Naborly Score is less than 550
- If the Tenant has provided identity documents that cannot be verified by Naborly
- If the Tenant has provided any income documents that cannot be verified by Naborly
- If the Tenant has any outstanding collections balance of over $500 on their credit report within the last 2 years
- If the Tenant has any judgments on their credit report
- If the Tenancy period is less than 2 months
Can I get NaborlyShield for a tenant who doesn’t have a credit file?
Yes. A large proportion of the renting population do not have any credit history. This group of credit-invisible renters are often young or newly arrived in the country and have yet to establish any credit history or have their overseas credit data transferred.
If I am signing a lease that is less than 1 year, can I still buy NaborlyShield?
Yes. You can purchase NaborlyShield for a lease term as short as 2 months.
Can I purchase NaborlyShield for a tenant who has not been screened through Naborly?
Not yet. Naborly will be launching a version of NaborlyShield in the near future for landlords to purchase for tenants who have not been screened through Naborly.
Can I purchase NaborlyShield for a tenant who has already moved into my property?
Not yet. Naborly is currently developing a version of NaborlyShield for landlords to purchase on tenants who have been screened more than 30 days ago.
If payments are processed directly by tenants via their credit card - what happens if they do not have a credit card?
Currently we only accept credit cards although we will be expanding to accept other forms of payment. If you have a tenant who is applying without a credit card we recommend taking a security deposit as your normally would.
What happens if they elect to pay NaborlyShield on a monthly basis?
It is up to you if you would like to allow tenants to pay for NaborlyShield on a monthly basis. If you allow for this, the tenant's credit card will be charged on a monthly basis. In the event that their credit card is declined, we will contact the tenant to correct the error. In the event that the tenant has missed NaborlyShield payments, we will let you know and provide you an opportunity to pay. If the tenant misses the NaborlyShield payment and immediately defaults, we will still honor the coverage. We will just subtract the fees owed by the tenant from the first month of rent we pay you.
After year 1 of the lease, my lease becomes month to month automatically. If I want to renew with Naborly, do I pay month to month? Do I get the same benefits?
Yes. After the initial term, you can terminate your contract by sending an email to firstname.lastname@example.org with 30 days in advance. The contract will terminate on the next earliest monthly anniversary.
NaborlyShield automatically renews after the first year unless you provide written notice to Naborly at least 30 days prior to the end of the term. Although your lease will now be month to month, it could still take 4-6 months to process an eviction and NaborlyShield will cover you with the same benefits.