Fresh for 2015
When you start renting out a property, one of your key concerns is who will be living there – will they treat your property with respect, and will you receive their rent on time? A good relationship between landlord and tenant is key to a smooth rental experience, and endless issues with problem tenants is most landlords’ worst nightmare. Many rent their property through an estate agent, who can then take care of financial and reference checks on potential tenants. However, as the following landlord’s story shows, checks performed by the estate agent don’t always guarantee reliable tenants. Here, Sally* tells us about her traumatic experience as a landlord, and offers advice to help other landlords avoid a similar situation.
Sally is one of Britain’s many ‘accidental landlords’; she moved our of her house over a year ago, and decided to rent it out rather than selling it immediately. She visited a local estate agent, who reassured her that finding a good tenant for the property would be simple. The agent did, in fact, find a tenant quickly – a single mother of four who was receiving housing benefit. After performing bank checks and verifying that the council would pay the tenant’s rent, the landlord agreed to a one year tenancy agreement, which was signed by the agent and the tenant.
However, about three weeks after the new tenant moved in, the landlord started receiving redirected mail from her rental property, with information about newly opened shopping catalogue accounts in her name. Various products such as baby clothes and a new TV set were ordered online and delivered to the rented house and used by the tenant. Although Sally was told by the police that it could not be proved that the catalogue orders were made by the tenant, the timing of incidents soon after the tenant moved made it an unlikely coincidence. After many similar occurrences, which caused the landlord much stress with the catalogue companies and their insurance providers, she decided to evict the tenant.
In July this year, however, the eviction notice was thrown out of court at a cost of £200 to the landlord, because the tenant claimed that she had never received the Section 21 notice. It turned out that the letting agent had failed to properly deliver the notice and did not get the tenant’s signature to confirm she had received it. In the meantime, the tenant was caught on CCTV trying to use a bank card belonging to the landlord that had been accidentally delivered to the rented property. Although the tenant is now facing criminal charges for attempted theft, this does not affect her housing, and she continues to occupy the rented property two months past the end of the tenancy. In fact, the tenant offered to move only if she received financial compensation.
At the same time, the landlord cannot count on any help from the estate agent. Although the agent is responsible for “full property management” there was no contract signed between the landlord and the agent defining exactly what such management would entail. In addition, the estate agent proved to be incompetent when dealing with the situation from the very beginning. He failed to get proper previous landlord references from the tenant, did not know how to conduct eviction procedures, and did not do any management of the property itself. The only positive aspect of the situation for the landlord is that she continues to receive rent every month, which is paid by the Council.
Having gone through all these difficulties, the landlord has some advice to share to help others avoid a similar predicament. Here are her recommendations for new landlords:
• Always perform proper background checks on your prospective tenants, or make sure that your letting agent has completed checks to your satisfaction. This is important even if someone other than the tenant, such as the council, will be paying the rent.
• Join a landlord organisation such as the Residential Landlords Association, which can help you with many of the tasks involved in renting and managing a property. You may also be able to skip using a conventional letting agent altogether, by joining a self-service online agency such as Upad.
• If you do use a letting agent, make sure that the company you work with is a reputable one, ideally with a long history in the business.
• Make sure that the property management agreement is in a written form and that it specifies all of the roles and responsibilities of the agent and the landlord.
• When deciding on the agreement with an estate agent, agree to pay fees in monthly instalments rather than paying all of the fees upfront. That way if anything goes wrong, you have leverage, which you can use to make sure that the agent performs the tasks that they have agreed to.
*Names have been changed as legal procedures are ongoing.