Reducing the Risks of Costly Legal Eviction Process for Landlords

4SNet
March 31, 2013

During 2012 approximately 59% of private residential landlords were left out of pocket as a result of having to deal with tenants who did not pay their rent on time, or at all, according to LSL property services – over 99,000 tenants didn’t pay their rent for two months or more – this is the highest recorded number of defaulting tenants since 2008.

Choosing the Right Tenant

Being cautious when it comes to taking on a new tenant can be a very wise move, but much easier said than done, when a landlord has an empty property and a mortgage to pay on it – it can be tempting to take short cuts just to get some rent coming in. However, this very often proves a costly mistake. It takes on average less than 4 days to complete and follow up a full and accurate tenant reference and credit check. This less than 4 days delay could help highlight issues which could result in weeks or months of unpaid rent.

Full Tenant Referencing –v- Credit Search

Many landlords believe a credit search report will tell them all they need to know about their potential tenant and how likely they are to pay the rent on time, after all this is in most cases the landlords main concern.

However, a full or comprehensive tenant reference provides so much more information than just a credit score. The full reference includes copies of all the tenant’s bank statements, previous landlord references to check the tenant paid rent on time without repeated prompting, credit checks incorporating fraud indicators, and employer or work-related references.

Identity validation and proof of current address are vital, ideally the tenant should produce tax or insurance documents showing their current address, however, utility bills will suffice – and landlords or their appointed agents should take the time to talk at length to all prospective tenants. A lot of the more professional referencing agencies also validate voters roll registration – another good indication that the tenant does not fritter between addresses.

Regular Property Inspections

Once the tenant is in situ, make mid-term inspections every 3 months to ensure the property is being used according to the terms outlined within the Assured Shorthold Tenancy (AST) agreement and to monitor the condition of the rental property. If the tenant repeatedly refuses to grant legitimate access, it can be a strong indicator that the landlord has reason to be suspicious. Sending in legitimate contractors for gas and electricity safety inspections can be a way to assess what’s going on at the rental property.

Issues Related to Illegal Activity at the Property

Police in England and Wales discover about 20 rental properties a DAY being run as cannabis farms. It is a common occurrence and sadly many landlords are totally unaware. Aside from the criminal element of what this entails, it causes great damage to the property itself, resulting in many thousands of pounds worth of damage.

Criminal gangs involved in people trafficking also use rental property to house people, often as many as possible, causing serious over-crowding and resulting property damage.

Regular property inspections should in most cases highlight these issues early on.

Dealing with Bad Tenants if all Else Fails

Even the most cautious landlord, with the most rigorous checks can fall foul to a bad tenant from time to time. Unfortunately that is part and parcel of being a landlord, and accepting that on occasion the only way to resolve the situation is to have the tenants evicted.

There are many individual grounds for eviction, the most common are:

Rental arrears; persistent late rental payments; sub-letting without consent; property damage and making a false statement knowingly – this one for example would be if the person lied on their application form that they earned £30,000 per year, when in fact they were living on benefits.

You can get more advice on tenant evictions here: http://www.tenant-evictions.co.uk – they also offer a free landlord advice line.