I’ve been a landlord for more than 20 years. And last year, in 2017 II had my very first court eviction.
Like many landlords, it’s tempting to think that if you are operating at the right level, with the right tenant-type, the right checks and systems and tenancy agreements in place – this isn’t going to happen to you.
The truth is that it can happen to any landlord. And it is both expensive and gruelling despite having your legal house in order.
Like with many other landlords, it was not the first time one of my tenants has had trouble paying their rent. Life happens to anyone. My approach, like many other landlords is always to attempt to resolve matters with the tenant and discuss their best options and plans of action. Normally we can put something in place where they can pay a reduced rent for an agreed period, until they’re able to get back on their feet. (For one of my tenants, this period was once six months).
Overall this approach has worked well. I’ve avoided void periods, kept some sort of monthly income from the property, and ended up on the other side with a grateful tenant who is highly motivated to look after my property really well and treat it like their home rather than a rental property – ultimately creating a win-win situation.
Tenants are human beings, and if it is within your power to throw someone a lifeline when they need it, I strongly believe you should do so. However, unfortunately that strategy didn’t work in this particular case, however.
The tenant was a professional working man in a House of Multiple Occupation (HMO), with great references and a good reputation with a top letting agent. However, when he lost his job, things went downhill for him. My managing agent informed me of his situation and I got involved. We talked and we agreed to reduce his rent for a period of three months to take the pressure off his job hunt.
From experience I don’t have mixed HMO houses where professional tenants and tenants on benefits live together it creates injustice and resentment between the tenants. The person not working is at home using up utilities, and taking over communal areas.
So when it became clear he was making no effort to find another full time job (although I discovered form another tenant that he was doing cash in hand work) I had to act. He clearly had no intention of paying full rent again at any point in the foreseeable future. So my agent spoke to him again, and he was served a section 21 notice.
The tenant denied receiving it, he also accused the managing agent of threatening him and contacted the council for assistance. The harassment officer of the council got involved and the other tenants filed statements to counteract his allegations, and the council finally concluded their investigations on this matter with no further action.
As the tenant was in arrears of rent the Council paid me the tenant’s partial rent – directly but there a monthly arrears of rent in the sum of £150.00.
However, everything changed in November 2016 when Universal Credit came into force which added another layer of complication. I stopped receiving even the partial rent from the council, and they started paying the tenant directly.
In July 2017 we served a Section 8 notice and the earliest date the court gave me was the 1st November 2017. I had to go to court for the possession order, which involved legal fees, court fees and barrister fees
However it was still not over. The official date for the tenant to move out in accordance with the Possession Order was 15th November 2017. However the Council advised the tenant not to move out until he was received the Eviction Notice – otherwise he was making himself intentionally homeless and then they would not assist him.
In the meantime the tenant was further in rent arrears, now in excess of £10,000. That meant further stress for me, a mortgage that had to be paid, and the other tenants were suffering due to his unreasonable abusive behaviour. Therefore we made a further application for an Eviction Order and the earliest date provided was the 25th January 2018.
A few weeks before the eviction I had to organise the bailiffs, locksmiths, and a police presence to prevent a breach of peace, all the while trying to keep the other tenants informed and make sure they were safe.
The eviction itself was dramatic and traumatic in equal measure. The tenant turned up halfway through, and there was a lot of yelling and threats made to the bailiff and the locksmith.
Altogether the process took nearly 2 years, and cost me all in all nearly £15,000 with the damage to the property, rent arrears and other legal and other expenses. It is not an experience that anyone should go through.
February 2016– Tenant moves in after he past all the necessary checks including employment checks.
April 2016 – Tenant loses his job and reduced rent agreed
June 2016 – The first Section 21 notice issued served recorded delivery and hand delivered by the agent.
June – November 2016-Council pays partial rent directly and we came to an arrangement for the tenant to pay of the arrears in small amounts.
November 2016– The Department of Work and Pensions (DWP) introduced Universal Credit which meant that their benefits were paid directly to the tenant and not to the landlord.
July 2017-The initial S21 Notice issued in June 2016 was now out of date. Therefore we issued Section 8 Notice served for possession and rent arrears.
November 2017– Possession Order granted for rent arrears and possession of the property.
November 2017 – Jan 2018– Eviction Court case for possession order and subsequent eviction order.
25th January 2018 – Eviction successful carried out.
The lessons to share
1. No landlord is immune from eviction.
If you cannot absorb this sort of cost it is well worth looking into insurance products like legal expenses and rent guarantee. The extra monthly cost might eat into your monthly income, but it could save your bacon if the worst were to happen.
2. Tenants, as my experience proves, are well educated and well advised about their rights. As landlords you must know your rights, too. Make it your business to look into the legislation around Section 21 and Section 8, and make sure your tenancy agreements are clear and water-tight.
3. Keep your systems up to date . If anything is not in order such as your HMO licence certificates to your Energy Performance Certificate, gas safety certificate to your tenancy deposit scheme – If not then you may not be able to serve the appropriate notice to obtain possession of your property.
4. Take care to keep records of the condition of your property, any maintenance work undertaken, and any interactions with your tenants. You may need the proof.
5. Ensure your notices are appropriately served,with witnesses, so you don’t go round the houses with your tenant denying they’ve received paperwork.
6. Follow due process.Even if your intention is to support your tenant, it is important to also protect yourself. If your rent is more than 2 months late you need to issue an immediate letter to your tenant calling their attention to your tenancy agreement and outlining your next steps.
7. Keep your insurer informed of any changes to your tenant’s circumstances You If you do have insurance, you don’t want it to be voided because a professional working tenant loses their job and goes onto benefits.
The truth is that while problem tenants are apparently on the rise, the majority of the hundreds of tenants I’ve worked with have been great. It’s vital to ensure that you and your agent undertakes a careful vetting process prior to the tenants moving into your investment properties, that your paperwork are in order and you serve the various notices for possession of your property and at the same time work with your tenant to resolve matters.
There’s no doubt in my mind that respect breeds respect, and that investing in those relationships can pay off – but so can preparing for the worst.