Rental Dream Turns Into A Nightmare

Rental Dream Turns Into A Nightmare.

Are you considering buying a buy-to-let property? Perhaps you have thought about dipping into your pension pot when new rules in April will make it easier to do so.If you have, be warned — being a landlord can be fraught with peril: unwanted tenants, unpaid rent and growing numbers of scammers all too familiar with how to get round legislation that is supposed to protect you.

“People think buy-to-let is easy but it’s a business,” says Paul Shamplina, founder of Landlord Action, a buy-to-let support company. “There are so many potential problems if you don’t know who you’re letting to. Some schemes are well run but many aren’t. We have seen a 50 per cent rise in instructions by landlords against rent-to-rent and sublettings scam companies in the last year.”

Rent-to-rent, a contractually agreed form of subletting where the landlord authorises a company to let a property on his behalf, has ballooned because it often involves letting individual rooms rather than whole properties — big business now rents are so high. London rents rose by 12 per cent last year alone.

The benefit for busy landlords is that they aren’t responsible for managing the property and have a guaranteed rent, even if there are void periods. The company makes money by charging tenants more than it pays the landlord.
Gary and Susan Bailey, both 46, and first-time landlords, found themselves in a “nightmare” scenario after opting for rent-to-rent. Within days of advertising their three-bedroom flat in east London, the Baileys came across an agent named Jerome Baker offering a reassuring guaranteed rent through his company Rent Sparrow.

They weren’t sure but Mr Baker upped his bid. He sent them details of his website, which had glowing testimonials and quotes from pieces about the business in newspapers including The Times. Then he emailed them a contract — an Assured Shorthold Tenancy (AST) agreement typical of regular tenancies — and they signed it.

When Mrs Bailey looked up the company, alarm bells started ringing. It had only been set up in December, despite Mr Baker’s claim that he had been operating for years. When she asked him about it he said they had previously been operating as sole traders.
But something still didn’t sit right. Mrs Bailey tried to call the number on the website and couldn’t get through. She discovered a virtually identical website for a company called Fixed Rent, with the same text throughout and the same newspaper quotes, just with different company names. The Times did write in 2009 about Fixed Rent but has never written about Rent Sparrow. “Landlord Action told us that rent-to-rent schemes should not be using an AST as it wouldn’t cover us if the company went into liquidation,” says Mrs Bailey.

Eventually they told Mr Baker that they wished to pull out. Lawyers advised them that without an exchange of keys and a deposit, and with the level of apparent misrepresentation, the contract would probably be viewed as unfulfilled. However, eight days after they had last heard from Mr Baker, the couple found that he had called a locksmith, changed the locks at 3am and, soon after, moved in tenants.

“We knocked on the door and Jerome answered, but the minute he saw us he slammed the door and yelled to us out the window that he would call the police. When the police arrived Jerome produced the contract and they said that it was a civil matter and there was nothing they could do,” says Mrs Bailey.

Mr Baker, who spoke to The Times, says he rang the Baileys several times to ask them for the keys, calls which they say they never received. The Baileys have not received a deposit, though Mr Baker has asked for their bank details, which their lawyer has instructed them not to give. It is easier to begin eviction proceedings with two months’ rental arrears and Mr Bailey could pay by cheque. Mr Baker says: “I have a lawful right to the property. They signed a contract. I told them we would take appropriate action if they did not give us the keys. We will not back down.”

The Baileys potentially face months of court action to try to have Mr Baker and the tenants removed. If they don’t win the Baileys could be stuck with a man they don’t trust for three years, since their contract has no break clause. Much of their case rests on the fact that they felt misled about Mr Baker’s credentials, particularly the false information on Rentsparrow.com

The case highlights the difficulty of removing tenants and the importance of checking credentials before signing anything, says Chris Norris, head of policy at the National Landlords Association. “Disputes are considered a civil matter so you are unlikely to get police assistance and can pay hundreds of pounds going to court.” A judge will often order the tenant to pay any rent due. But if that person refuses to pay and has no assets to sell it can be difficult to reclaim the money. If they disappear, as many do, it can be impossible to get your money back.

Landlord Action put The Times in touch with Raquel Cruz, who says she lost thousands of pounds to a man called Jerome Baker, with a physical description similar to the one in this case. She said she took him to court three years ago after he illegally sublet her property and then never paid rent. Mr Baker was ordered to pay nearly £9,000. “But he disappeared and we’ve not seen any of the money. I had just had a baby and the stress was awful,” she says. “If someone steals a bag of crisps they get prosecuted. But if they illegally sublet your property and don’t pay you, nothing happens.”

Mr Baker refused to speak to The Times about Ms Cruz’s allegations. He also claims that he paid a freelancer in India to create a website and that the doctoring was done without his knowledge. He did not agree to take the current site down straight away, saying: “We are seeking legal advice to begin a case against this freelancer for deceiving us. We are now totally rebranding Rent Sparrow with a completely different name, logo and a brand new website which will be up very shortly.” He is still advertising rooms on sites such as Gumtree.

Here are some things to consider before you sign on the dotted line:
· Does the lettings company belong to a regulated redress scheme such as the Property Ombudsman?
· Have a lawyer check over your contract before you sign. If things such as Houses in Multiple Occupation (HMO) liability aren’t included you could face huge fines.
· Can you afford the mortgage if the rent stops? Remember to have a back-up plan.

Precise Treatment Reduces Pain

Detail needs experts. Expert time is worth it when it saves you a costly mistake. Main objective: Get the property back. Best action: Very precise treatment.

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.

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