Time spent building a professional landlord/tenant relationship will reap rewards. Stephanie Robinson highlights the importance of striking a balance between friend and foe...
We start May on a high note – the average rent in England and Wales is on the rise. Unfortunately for landlords, this is offset by news that tenants’ finances are worsening.
How do I make sure I’ve found the right tenant?
For your property investments to remain profitable, you need long term occupants. Aim to foster good relationships with tenants, but not at the expense of your returns – you must keep on top of rental payments.
This may seem like obvious advice, but in reality it can be difficult to achieve the right balance.
Poor or detached relationships with tenants are linked closely to non payment of rent, placing stress on the future prospects of your agreement. It is important, particularly in the current climate, that you protect your investment by managing this situation carefully.
With this is mind, start as you mean to go on with thorough credit checks for new tenants.
Have a clear system to deal with arrears and be aware of legal options.
Follow these simple steps:
Request credit checks on all new tenants.
Gather references from a previous landlord and current employer – you must have the tenant’s permission for both.
Acquire identification from your tenant.
Obtain evidence of their ability to pay the rent, including employment information.
Carry out a thorough inventory that you both sign.
Seek a guarantor where necessary.
Request a deposit and protect it using one of the government endorsed schemes.
These steps will offer you some peace of mind.
My tenant is now two months behind with his rent, what should I do?
If your tenant falls into arrears it is important to speak to him about it as soon as possible.
If payment is not made and a repayment plan cannot be agreed, you may decide to take steps towards regaining possession of the property.
Should you decide not to pursue possession, or the property has already been vacated,you may wish to issue county court proceedings against the tenant and/or the guarantor for the arrears.
You will need a forwarding address for this, which may not be readily available, although a tracing agent should be able to obtain it.
If your claim for possession is successful you will be granted an order of judgement against the tenant, but this does not mean you will automatically receive the cash.
If payment is not forthcoming, you will need to enforce the judgement through a court application.
Enforcement can be done in a number of ways, for example, you could ask the court to order the tenant’s employer to make payments to you every month, deducted from his salary, until the debt is paid.
Or you can instruct a high court enforcement officer to seize goods to the value of the judgement.
There is very little point issuing court proceedings against someone who does not work or is unlikely to have possessions of any value.
Careful management of your letting has to be a better prospect than a court battle. Don’t let arrears get out of hand.
Stephanie Robinson is a solicitor specialising in property and commercial litigation at Sheffield’s Taylor&Emmet LLP. Call 0114 218 4000 or visit www.tayloremmet.co.uk and www.landlorddisputes.co.uk.