How to spot and avoid rogue tenants
Our panel of experts, this week, share their tips on how to minimise the risk of rogue tenant behaviour affecting your profits and property.
Chris Norris, head of policy at the National Landlords Association, gives three tips of how to avoid being out of pocket from bad tenant behaviour.
David Lawrenson, private rented sector expert at LettingFocus.com, discusses how you can protect yourself from future disputes and how to educate the tenant in looking after the property while it is their home.
Roger Morris, professional landlord and sales director for Precise Mortgages, shares his experiences of poor tenant behaviour and provides practical advice on putting in place preventative measures.
Rogue tenants can be a problem for some landlords and regaining possession of a property can be very costly and time consuming, especially where rent is unpaid or the property has been damaged or abandoned.
In the last year, 35% of landlords have experienced rental arrears, 29% have had property damaged by their tenants, and 13% have experienced anti-social behaviour.
Here are three tips to protect yourself from bad tenants:
1. Carry out a full tenant check before granting a tenancy. When taking on a new tenant you’re taking on a risk, so be sure that appropriate checks have been carried out before handing over the keys.
2. Compile a detailed tenancy agreement and inventory at the beginning of the tenancy. These documents are incredibly important if you find yourself with a rogue tenant. They should fully outline the tenant’s obligations, as well as detailing the contents and condition of the property and its fittings at the start of the tenancy, so you have a basis for comparison when your tenant moves out.
3. Take a deposit to protect against damages and unpaid rent. If you take a deposit and have all the documents as set out in point two, then it should be relatively simple to justify making deductions at the end of the tenancy should you need to rectify any damage or replace missing items. But remember to protect the deposit properly with a tenancy deposit scheme such as Mydeposits.
There are many ways you can help yourself avoid a duff tenant in the first place. If you are in any doubt about whether the tenant can afford the rent, or have concerns about their past track record, don’t let to them in the first place. I would advise you not to trust a letting agent to do carry out referencing checks, do them yourself.
It’s good practice to ask for documents including tenants’ bank statements to prove affordability and to act as secondary proof of their identification. It won’t be the agent that’s losing money if the tenant later doesn’t pay the rent.
A big cause of aggro tends to be the end of tenancy clean because they often aren’t good enough. So, if your inspection a month before the leaving date clearly shows that your tenants wouldn’t know a duster if it hit them in the face, suggest they get a professional cleaner in to do the end of tenancy clean. Again it’s not expensive and don’t forget to make the tenants pay the cost of this.
We’ve noticed a huge cause of disputes is over condensation because many tenants don’t know how to manage it and because they don’t properly heat or ventilate the homes they live in. Give them a good guide – there are lots online you can use.
If rent payments are late follow the correct processes. It’s easy to get legal processes wrong, so use a professional who understands this area of law. Avoid dabbling “do anything” high street solicitors as they may not know what they are doing. However, if you check out the tenants right in the first place, you should never have a late payment or damage. We have not had one in over 30 years.
I always stress when letting property make sure to use a great letting agent unless you have the time and experience to background check prospective tenants to minimise the risk of a bad experience.
Apart from the obvious, such as damaging the property and not paying rent, tenants can neglect utility bills. If the tenant fails to switch a gas or electricity account into their name they may run up a large bill which they may avoid paying. This can be prevented by installing pre-paid meters in the property. Council tax is trickier to monitor. It is possible to prove non-payment by the tenant if you have a fixed tenancy but once it rolls onto a periodic agreement, if the tenant doesn’t pay, the landlord is liable.
The best measure to protect your property is to carry out as many checks as possible; credit search, employment and landlord referencing. I would issue a note of caution here though because some landlords will lie and provide a good reference to get the tenant out of their property which is cheaper than taking them to court.
A home visit is always a good idea where possible. If the tenant is looking after the property they generally have no objections to you visiting.
I recommend that landlords personally check a tenant’s identification rather than relying on someone else. Previous addresses are sometimes handy. We traced one tenant recently back to her mum’s address when she decided she wanted to leave the property without any notice and without handing the keys back. We needed her to hand the keys over and sign to say she gave the property up otherwise we couldn’t re-let it.
The higher the bond the more protection against damage, however, you’re only allowed to take two months’ bond as a maximum which does not go far if a tenant wants to cause serious damage. The best prevention for this is to keep up a good professional relationship with the tenant so that they don’t want to cause any upset.
Always keep a spare set of keys just in case the tenant decides to stop communicating with you as you can gain access as long as 24 hours’ notice is given.