We continue with the mini-series on property horror stories, this time focusing on tenants. I consider myself quite fortunate as a landlord, as I really don’t have that many stories to share, thank goodness! However, with a little help from my friends, here are some tenant horror stories that you would not wish to encounter such as; tenants operating criminal activities, deception and an array of issues involving animals!
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Transcription of the show
Hello, and welcome to another episode of The Property Voice podcast. My name is Richard Brown and as always, it’s a pleasure to have you join me on the show again today.
We continue with the mini-series on property horror stories, this time focusing on tenants. I consider myself quite fortunate as a landlord, as I really don’t have that many stories to share, thank goodness! However, with a little help from my friends, here are some tenant horror stories that you would not wish to encounter such as; tenants operating criminal activities, deception and an array of issues involving animals!
Property Chatter
Tenants from Hell…
- Not so lovable rogue
Hayley is a lovely lady, who genuinely likes to help people out, I know this first hand as she has been so giving of her time, contacts and expertise towards me at various times over the years. So, to hear this story of hers is particularly upsetting.
Hayley has a rather nice flat in a sought-after postcode of London. She has rented it out without problem both before and after this story, but this one bit hard, sadly.
A young man wanted to rent the flat. Previous landlord references were not available due to him living at home with his parents, which sounded plausible enough. So, he passed the reference checks and duly collected the keys to the property.
The deposit and first month’s rent were paid without fuss…then it started to go wrong. The second month’s rent was delayed as was any contact to explain the situation. Finally, contact was received, along with an apology, that a family member had passed away and he had to attend the funeral abroad…rent was finally paid around 4 weeks late. The next month…was like Groundhog Day, although this time no family bereavement, just another excuse ‘my mate was supposed to pay the rent, sorry he hasn’t but I will take care of it’. He didn’t.
That’s when Hayley realised that all was not well. To cut a long and very stressful story short, no more rent was paid, no contact was received, and a property inspection confirmed that the flat was not lived in, just used as a postal address.
A long, arduous and very costly court process, including bringing in Landlord Action, finally resulted in possession being regained around 8 months later. The total loss by this time was around £11,000 including lost rent, legal and court costs and rectifying damage to the property…ouch!
During the process, Hayley looked up the tenant on social media and Google and to her shock and surprise, discovered that he was previously convicted of a serious assault. His time living at home seemed to include several years at Her Majesty’s pleasure. Further digging suggested additional criminal activity.
At the court hearing, he didn’t show up, but has gone to ground and cannot be located to enforce the court award in Hayley’s favour.
Hayley probably didn’t do very much wrong here, she appointed a letting agent, who did the ID, earnings and other reference checks, which broadly checked out. So, what steps could have been taken to try and avoid or limit the damage here? Well, in the wrap-up we discuss some steps that might have helped.
- When a £500 Council Bond ends up costing £15,000!
Nicholas Stott runs a lettings agency in the Liverpool, Wirral & Cheshire area called Homesure Property, so he has seen a few things in his time. In fact, I started our conversation by saying perhaps the worst situation I have faced with a tenant was when one died in the property. He replied, I think we are in double figures with tenant deaths now! He wasn’t referring to anything to do with his properties I hasten to add.
In chatting to Nicholas, a few stories stood out and this is one of them. A landlord that lived a long way from their property appointed his agency to rent it out at ‘the highest rent possible for the area’, mainly as he seemed to have overpaid for the property and so was under pressure to achieve a high return. This led to considering a tenant on benefits that came with a Deposit Bond from the Council of £500, but with the promise of the highest rent, along with direct payments, which compared favourably to others that had seen the property.
The problems began when the tenant had their benefits cut, with the amount assessed for housing reduced from £160 per week to just 50 pence per week instead. Clearly this placed a significant strain on the tenant’s finances. As Nicholas observed, when the Benefit Cap is hit (£500 per week), the individual benefit cut first is the housing benefit, rather than reducing the total benefit proportionately. This means the tenant has to work this out for themselves and take money from other benefits (for example, Income Support), to pay for their rent. This of course ultimately adds to the housing crisis and the social housing crisis in particular. Add to this the general advice that is often provided by Citizens Advice Bureau and Local Authority Housing Departments for tenants to sit tight and await eviction when in arrears. Contrast this advice when things go wrong with the ‘beg you to let’ approach to a benefits tenant at the front-end and it does all seem a little bizarre and lop-sided in this sector at times.
In this case, the tenant refused access and then it took months to go through the courts to regain possession for non-payment of rent, which was further compounded by an error by the court itself. Possession was only regained when the bailiffs came around to visit, at which time, besides significant rent arrears, the property was also left in a terrible state of squalor, disrepair and damage. To add to the landlord’s burden, the tenants left behind their possessions, which the landlord was then responsible for safekeeping as ‘bailee in possession’ for two-to-four weeks to allow the tenant time to return to reclaim them or could face a claim from the tenant if not.
All in all, the landlord had costs of around £15,000 in lost rent, court fees, eviction costs, repairs and damage. The story made the papers in fact, just Google ‘Mersey horror house’. When asked to comment, the Council said that the landlord had failed to renew the property bond after the first year, which was not strictly true, as the tenant refused to sign the tenancy renewal, again leaving the landlord stranded. The property bond was the equivalent of a tenant deposit for £500, so would not have made much of a dent in the losses suffered by this landlord anyway. Nicholas sagely said, ‘the highest rent doesn't always translate to the highest profit when all factors are taken into account. It's often more profitable to take less rent!’.
- A few more sorry tales
Another from Hayley, was where she let a property to a ‘young working couple, with no kids and no pets’, only for this to turn into a single mother on benefits, pregnant with a second child, along with two small dogs within 6 months!
OK, so people’s situation and circumstances do change, and we should be aware of that, showing support and understanding to help stabilise the situation where possible. The thing here was that Hayley’s mortgage and insurance specifically prohibited the letting to tenants on benefits, whilst controversial, she was left with no option but to refuse the renewal of the tenancy and ask the tenant to vacate.
However, the tenant has since ‘taken advice’, has not paid any more rent and has now reported a number of faults with the property that were not there before. The merry-go-round of enforced court action and delayed eviction starts all over again, so Hayley is waiting to regain her property at a huge cost in the meantime.
Another one from Nicholas, was where a couple failed the reference checks because the boyfriend of the couple worked on a zero-hours contract. However, his partner was able to pass the reference checks alone, so they agreed to let the property to her but with the boyfriend as a ‘named occupant’, rather than as a tenant. The couple subsequently split up and the girlfriend left, leaving the boyfriend in the property. However, it transpired that named occupants also have rights and so he could not be removed without a court eviction process. Here follows what he did next.
He was growing weed, not just the odd plant but a full-on cannabis factory! This meant bypassing the electric meter, ripping down walls, stapling doors closed and basically destroying the property. Meanwhile, he refused to pay rent as the eviction process was slowly grinding away in the background. After possession was granted, but before bailiffs arrived, he left the property with the back door open, rubbish bags including food waste inside the kitchen and the heating on full to create a perfect, rat-friendly environment. He also left the gas on the cooker turned on and the heating on full blast no longer bypassing the meters, purely to spite the landlord with extremely high utility bills and rat-infestation problem to deal with!
Nicholas also seems to have lots of tenant stories involving animals for some reason! As he put it to me, ‘other stories include snakes & spiders, a zoo-come-house, and us looking after a turtle in our office.’ The snake story was particular frightening, where a couple vacated before eviction, but left behind a five-foot python in the hall way to deal with!
Whilst these stories are at the more extreme end of the scale, here are some common tenant problems…
- Rent arrears & non-payment
- Doing things without permission such as pets, decorating, fixings on the walls, etc.
- Repairs, maintenance and damage disputes – such as damp vs. condensation, new for old replacement, tenant vs. landlord responsibility for works, etc.
- Access denied for inspections, viewings, etc.
- Deposit disputes such as fair wear and tear, cleaning, damage, final rent unpaid etc.
- Legal issues resulting in delayed possession such as deposit protection, non-issue of prescribed information, non-compliance of regulations/responsibilities, failing to fix repairs, tenant harassment or procedural mistakes with paperwork and the court process
Lessons learned and steps to take to help protect ourselves
- Due diligence – always undertake full reference checks, including social media and Google searches, undertake a professional application process, with supporting info including copy bank statements, address checks and landlord/employer references.
- Communication & expectations – set out what is expected of the tenant at the onset, both in-person and in writing. Make sure any issues spotted at inspections are communicated at the time and followed up in writing and follow up later.
- Protection – take a deposit, rent guarantee insurance or have a contingency fund along with landlord contents insurances that includes cover for rent arrears, legal support and malicious damage, unless you have very deep pockets! Remember, a deposit is usually worth around a month’s rent, but the horror stories above resulted in a loss equivalent to one or two years rent! Equally, a detailed inventory with photographic evidence can avoid many of the problems with deposit disputes at the end of a tenancy.
- Experience and knowledge – know the law and each other’s rights, become an accredited landlord or appoint a respectable letting agent that is a member of a recognised trade body and do not go it alone when things go wrong, instead get professional support in to get it right and reduce the stress too. Equally, certain tenant type are special cases that can involve complex legal issues to navigate, including benefits tenants. I am not saying don’t rent to people on benefits, as there are plenty of decent tenants that receive benefits, don’t cause any problems and just want somewhere decent to live, although these don’t make the headlines! Just that you and / or your letting agent needs to be highly experienced and up to date with the law and the processes to navigate this sector. Then, recognise that there are risks associated with the special cases that might mean the ‘paper yield’ does not reflect the ‘actual yield’ received in the end.
- Common sense approach – Be reasonable, balanced and take a step back; treat this as a business but when things change, as often they do, try and encourage a dialogue and a sensible and manageable resolution. Do the modern-day background checks using social media and the Internet to weed out the bad apples. Set the right example yourself by providing a safe, warm, damp-free and fully working home for your tenants; undertaking repairs and fixing problems as they arise. Remember that properties do need maintaining and items, such as carpets, white goods and décor, do degrade with ‘normal wear and tear’ from everyday living; so, don’t be too nit-picky when the tenant vacates. Finally, protect yourself from danger and recourse by avoiding harassment or threats and enlist professional support rather than be directly confrontational if things do go wrong.
Obviously, this feature does focus on some pretty bad situations that have and can arise with tenants. However, to put things into a more balanced perspective, I have not had too many tenant horror stories myself and that’s why I had to enlist the support of Hayley and Nicholas. Nicholas was also at pains to explain that the reason that he has so many stories to share is that he has been involved in managing properties for 14 years now, currently handling 500, so it’s more a case of probabilities than anything related to his experience!
However, do expect a few niggles along the way, as we are talking about people and the homes they live in. Things do break or wear out and people’s circumstances also change at times too. Adopt a business-like approach and many of the problems cited can be avoided, managed or protected against to help reduce the chances of us facing a tenant horror story of our own.
OK, that’s another horror story shared again this week. As ever, the show notes can be found over at www.thepropertyvoice.net. Or, if you want to talk about anything from today’s show, or just talk property investing more generally, email me at podcast@thepropertyvoice.net, I would be happy to hear from you!
Once again, all I want to say is thank you very much for listening once again this week and until next time on The Property Voice Podcast…it’s ciao-ciao.