Whether it’s an HMO or a buy-to-let, letting tenants loose with your property can be nerve wracking. So how do you protect yourself if those tenants become a problem?
If you’re not familiar with managing properties, the safer option will always be enlisting the help of a letting agent. They’ll be able to safeguard you by ensuring the right checks are done and that contracts are correct from the outset.
But if you intend on self-managing, you’ll effectively be ‘going it alone’ and finding those dream tenants will become solely your responsibility.
There’s lots you can do to be the best landlord possible, but sometimes that’s not enough. How do you make sure you’re protected if your tenants don’t keep up their end of the bargain?
You have to protect your own rights (and your property), while also making sure you’re not being unreasonable.
We’ve done a podcast on how to deal with nightmare tenants, but as this was a while ago, we thought we’d do an update.
There’s over 60,000 Hubbers on the Property Hub Forum who’ve shared horror stories about difficult tenants. Thankfully, many have also shared their advice and insight on how best to deal with them! So, if you’re ever needing advice from those who have been there and done it, head over and join the conversation.
So, here’s your quick guide on how to protect yourself from problem tenants.
The best defence is a good offence.
If you vet your potential tenants to a high degree, then chances are you won’t ever have to deal with problems in the first place!
Getting references from your tenants is par for the course, but it’s absolutely vital that you follow them all up. Employment references, former landlords – the more information you can get, the less likely there’ll be a nasty shock down the line.
It’s also a clever idea to visit their current property as part of the referencing. You can see how they treat their current property, and get a good feeling about whether they’ll treat yours with the same respect.
If you’re using a letting agent, they’ll have processes in place to vet tenants properly for you. But if you’re managing the property yourself, then you should always make sure you’ve met your future tenants before they move in.
This is especially important when it comes to letting a room in a HMO.
As each room has a separate contract, you don’t want the atmosphere to become hostile thanks to clashing personalities. Situations like that can ultimately affect the rentability of rooms and the sticking power of your tenants.
By introducing existing and prospective tenants, you’ll get a good indication of whether they’ll get on. A happy house with happy tenants should hopefully result in a long-term arrangement and a happy landlord.
Note: If you’re not sure of your rights when it comes to referencing, you should contact the National Residential Landlords Association.
One of the most sure-fire ways to protect yourself from a problem tenant is by making sure you’ve got robust agreements in place.
If your property is going to be rented out for more than £250 a year but less than £100,000 a year, then you’ll most likely have them signing an AST – an Assured Shorthold Tenancy Agreement.
There’s a full list of what should be included in an AST on the government website, but for the purposes of this guide, here are some of the most vital things for you as a landlord;
A solid agreement is your way of making sure your tenants know what they are responsible for in your property. Having this in writing and signed by tenants is a handy reference point if they begin to become difficult.
For instance, if you’re keen to keep good relations with your neighbours, you can specify that you will only tolerate three complaints before seeking further action on your tenants.
It’s good practice to get legal guidance if you’re producing your own AST before you share this with potential tenants.
Clauses aren’t a way to catch potential tenants out. Rather, they’re your opportunity to draw the line on what kind of behaviour you’re willing to accept in your property.
That way, should the tenants become difficult, you (and your property) will be legally protected.
It’s also worth considering Landlord Insurance. Yes, it costs money, and you may never need it (hopefully you won’t), but it’s another protection from a problem tenant.
Don’t let a problem tenant turn you into a problem landlord.
If a tenant gets really fired up or inappropriate, remember to keep your cool and stay professional.
That’s why we stress the importance of keeping everything in writing. That way, there’s a record of communication that’s crystal clear.
Regular rental payments are important – even more so for landlords who have a mortgage to pay. If this slows down or stops entirely – what do you do?
If you’re self-managing, it’s important to have a process in place for days the rent is due. Taking action when you’ve not got rent is important, so your tenant will get accustomed to it.
Of course, as we’ve seen from the COVID-19 pandemic, there are some situations which are simply out of a tenants’ control when it comes to their livelihood.
What if you’ve had a great tenant who’s always paid on time and is going through a rough patch? It’s your call whether to offer them assistance by reducing or pausing rent until they get back on their feet.
This could save a relationship with a historically valuable tenant.
But if the rental arrears are piling up with a tenant you don’t have much of a relationship with, then you’ve got different options.
For example, the first day after you’ve expected payment you might email explaining that rent hasn’t been received. This gives them the opportunity to explain why. Day two might be a phone call to find out more.
A process not only keeps you on track of your payments, but it also sets a precedent. They won’t get accustomed to late payments if they know that you’re never going to miss one! A relatively simple way to protect yourself against behaviour typical of problem tenants.
And of course, if it keeps happening, there’s other options to explore.
If your tenant continues to be problematic, you can start the process of getting your property back. Typically this is done by serving a Section 21 or a Section 8 notice if they’ve broken the terms of the tenancy.
There are conditions, so it’s worth reading and making sure you fully understand where and how you can use these tools. We’d of course recommend seeking legal advice where necessary. Again, if you choose to use a letting agent, they’ll do all this on your behalf and advise the best course of action.
It’s worth noting that since the COVID-19 pandemic, the notice periods for a Section 21 is longer. If you gave your tenant notice on or after 29 August 2020, the notice period must be at least 6 months.
Eviction may seem like a drastic decision but sometimes you’ll need to consider whether it’s worth sticking it out. Sometimes it’s better to replace the tenant completely, rather than waste time trying to remedy a situation that’s become exhausting.
There are instances where notices don’t do the trick and you’ll need professional help to get your property back. We’d always recommend getting legal advice should you get to this stage.
So, there you have it! These are just some of the ways to protect yourself and your property from problem tenants when self-managing.
If you have any questions or would like to connect with like-minded landlords, why not join us over on the forum? Head on over now.