Don’t let your guard down – It could cost you.
Don’t let your guard down – It could cost you.
This week I was filming two stories for the third series of Channel Five’s ‘Nightmare Tenants, Slum Landlords’. Both landlords had been ‘duped’ by their tenants, and the similarities in these cases got me thinking…why? How? And what could these landlords have done differently?
The first case was a property in upmarket North Kensington, where the landlord had advertised her property on a well-known classified ad website. Landlords who choose to self-let and manage (without the assistance of a letting agent), often use these kinds of sites to advertise as it allows them to deal directly with the tenant.
Unfortunately, we have had a lot of problem tenants brought to our attention by landlords who have taken this route. What starts out as a money saving exercise often ends up costing the landlord twice as much.
The landlord was contacted by a very well-spoken chap who showed a keen interest in the property and said, owing to his circumstances, he needed to move in quickly. At this point, I should mention that the landlord’s mother, who is joint landlord, had already found a letting agent to let the flat and had a prospective tenant lined up. Unfortunately, the offer was for less than the amount offered by the charming, well-spoken man. The daughter carried out the viewing herself and after the first meeting, the deal was done.
The tenant said he was a trader and produced a work reference, but nothing else – no bank statements, previous landlord references or proof of address etc. He paid half of the deposit and the first month’s rent, and then moved in, along with his girlfriend, who was not on the tenancy agreement. Obviously, you can see plenty of question marks here already.
Soon after moving in, the tenant sent a cheque for the other half of the deposit but, surprise surprise, it bounced. The second and third month’s rent were also not paid, and the tenant is now approaching month four of arrears. We have served a Section 8 notice but my gut feeling on this one is that it will go to the bailiffs. Sadly, this tenant has most probably done this before – a serial bad tenant.
The second case was a property in Cheshire. This particular landlord had previously lived in his property for 30 years, but had to moved into his elderly mother’s house to look after her. Whilst having a drink in his local pub, the landlord was befriended by a tenant. The tenant had overheard him talking about moving out of his family home to look after his mother, having just spent over £30K renovating the property…Cha-Ching.
After a few more beers, it was agreed that the tenant, who was not working, along with his girlfriend would look after the property for a few months, while the landlord moved in with his mother. Yes, you’ve guessed it, the tenant moved into the property with no references taken, no deposit received and no tenancy agreement ever signed. Big mistake.
Like so many I have seen before, the landlord did not see himself as a landlord, and therefore did not understand the complexities involved in the process. Instead, he saw a solution to his problem that also helped someone else – he was being kind. The landlord even charged the tenant half price rent (just £350 a month for a two-bedroom house) and agreed with the tenant that his benefits would be paid to him directly.
The tenant stopped paying rent for the last few months and Landlord Action was instructed to serve a Section 8 notice.
I travelled up to Cheshire with the film crew to meet the landlord – who then decided to then let me know that the tenant was ex-SAS, a drug dealer with a drink problem who had allegedly assaulted his girlfriend and was banned from nearly all the local pubs for fighting. After some discussions concerning safety, we arranged for the local police patrol to be present at the time of serving notice, but the tenant didn’t answer the door.
I have re-visited the property this week and the good news is that the tenant has, for some strange reason, handed the keys into the police station. The landlord now has possession, avoiding a lengthy court action and the property was also in a fair condition, so on this occasion, a good result.
HOW WERE THESE LANDLORDS FOOLED BY THEIR TENANTS?
They treated the job of being a landlord more like a favour than the commercial arrangement that it is.
They forgot that there are many laws and regulations that protect both parties. And when something goes wrong, if the landlord has not behaved by the book, a resolution is more difficult.
Both these landlords behaved like decent humans. They forgot that not everyone will be just as decent in return. So they failed to protect themselves.
WHAT COULD BE BEEN DONE DIFFERENTLY?
Firstly, a reputable letting agent, could (and should) be instructed.
Secondly, thorough referencing checks should be carried out, by the landlord or a referencing company. Solid referencing flushes out bad tenants.
Thirdly, a thorough tenancy agreement should be drawn up and signed by both parties. Your tenancy agreement is your credit agreement.
Never be rushed into deciding who to take on as a tenant, gut instinct is good, but not good enough.
My final piece of advice – avoid using the pub as a letting agency. It normally ends in tears.
DON’T BE DISHEARTENED
Yes, there are rogue tenants who prey on vulnerable landlords who don’t know enough or let their hearts rule their heads. But there are also millions of great tenants out there – happy to abide by the reasonable measures that landlords take to protect themselves.
Serving a notice is actually the most important part of the possession process.
It isn’t complicated but one tiny error can cause dreadful problems.
That’s why we say, don’t DIY and don’t use internet amateurs. It’s not worth it.
1. Compliance Errors
If the tenant doesn’t leave at Step1, the notice had better be valid. Because then it has to go to court. Any little error can get a case thrown out. And you have to start all over again.
2. Attempting Short-Cuts.
In an effort to be quick, some internet services aimed at landlords are using short-cuts around the process. But if the tenant doesn’t leave (50%) these practices can backfire at court and the case thrown out.
3. Trying to Save Pennies.
Internet services have mushroomed and landlords can expect to get what they pay for. To get the process done PROPERLY it takes a certain amount of time for an expert to look over a file and be accurate. Our fees cover that expert time.
Chasing courts for dates, arranging advocates and preparing court papers is time consuming. Especially if you’ve never done it before.
Some landlord and agents have served notices themselves. They believed they were saving a few pounds but it often ended up costing them more.
If you lose a claim, the court can order you to pay the tenant’s defence cost, which can run to hundreds or thousands of pounds.
Our in-house Solicitors are there to get your property back as fast as they can. And we protect landlords and agents from themselves.
As experts, we know that in the rush to get things done, errors can happen. And those errors can can come back later to mess up your case – and the whole process has to start again.
You can speed things up – give us accurate information quickly. Help us to help you.
There are services on the web who will prepare papers BUT they get you to pay the court-fee separately and get you to sign the court papers – so in fact they don’t represent you!
If your notice (at Step1) wasn’t drafted or served correctly you risk wasting your court fees and losing a whole lot of time because of a small error.
We won’t let your case anywhere near a court until we have checked every little detail. To make sure you don’t waste time or money, at Step-2 we first only charge part of the fee.
If your notice is fine, then you just pay the balance of the fee and we issue the claim. If there is a problem with your notice or paperwork, we will advise you what to do next.
Courts take the view that possession proceedings can make someone homeless. So they are very careful. If there’s any error in the notice, they throw the case out. It’s the process. Get it right or lose.
If the notice is invalid, you have to start all over again. The weeks or months you’ve waited are wasted. If there were rent arrears, there are now more.
If there weren’t rent arrears, they might now start. More fees. More lost rent. And still no possession. Tenants can be alerted to making a counter-claim.