Are you the landlord of a property and have found yourself in a situation in which you are dealing with difficult tenants, or, is it a huge concern of yours about what you would do if you were to encounter such a problem? As a landlord, it can be hard to know exactly what your rights are, especially when the kind of issues you may be having can vary (for example, it could be to do with the fact that rent has fallen into severe arrears, or it could be that they have been evicted and won’t leave, or creating damage to the property). Secured Loans explains some of the ways you can deal head-on with potential problems with nightmare tenants in your property.
Tenants whose rent has fallen into arrears
Of course, as a landlord, it can be very frustrating to have a substantial amount of rent that is in arrears. It could very well be impacting upon your own finances if a number of months have been missed. There are a number of things you can do though such as:
- From the beginning, keep a record of when payments are due and when they must be paid. This will also help you in the future if you need to make an application for possession in court at a later date due to arrears, as they will require a copy of all rent payment transactions in order for the case to be able to go forward
- By first class mail, send your tenant a formal demand for payment if you have not received the rent payment within the stated seven days
- If after the initial formal demand you have still not received the money, after 14 days of receipt you should then send a letter to the guarantor of the tenant to get the rent payment from them instead
- After 21 days, if you still haven’t received money from the tenant nor the guarantor you should then send one final letter, but stating that you will be intending to now start legal proceedings as a result of defaulting on payments. Under the Housing Act 1988, you have a legal right to claim possession of that property if a tenant has been in a property for a whole month without paying, plus another month still due. You will need to serve a Section 8 notice, which will also inform the tenant that he will be taken to court if he doesn’t pay within 14 days.
- If it comes to the point where you take court action, you can ask the court to make a judgement for the arrears of rent and costs incurred against the tenant in question. Furthermore, depending on the insurance company you are with you may find that you are protected against the costs inflicted as a result of a tenant going into arrears.
When a tenant damages your property
It is important as a landlord that you know your rights if a tenant damages your property. If this does happen, a tenant must inform you with immediate effect if damage to fittings or furniture has occurred, with a conversation about repair or replacement costs being arranged. The exact obligations of both the landlord and tenant should be outlined in the assured shorthold tenancy (AST) agreement. You should remember though that if damage has been caused due to wear and tear this will be your legal responsibility to sort out and pay for, not the tenants.
If you aren’t informed about damage to a property, you will be able to identify this when you make the inventory check at the end of the tenancy. At this point, it would be possible for you to deduct an amount from their deposit, or take legal action against them in order to make a compensation claim for the damage caused to the building or furniture in it. However, it is important to remember that the deposit is held in an independent tenancy-deposit scheme as this means that cases regarding damage can be settled by an independent arbitrator and therefore dealt with fairly.
Disputes over tenancy deposits
As previously mentioned when a tenancy pays a deposit for your rented property, it has to be placed in a tenancy deposit scheme. There are two types to choose from:
- Insurance-based scheme – this is where you keep the deposit but you make monthly insurance payments to the scheme
- Custodial scheme – you pay the tenant’s deposit directly into the scheme
If a dispute arises regarding the paying back of the deposit and neither you or the tenant have reached an agreement you can go to the Alternative Dispute Resolution (ADR) service. This is a service that is completely free of charge and is provided by the tenancy deposit scheme to help deal with disagreements. It is still possible to go to the small claims court and choose not to go down this path if you so wish. But you should remember that if you and your tenant agree to use this scheme you will need to provide a considerable amount of evidence when it comes to the claim, and you need to be aware that the decision that is made regarding the deposit payment will also be final when the dispute resolution services rules its judgement on the decision.
When it comes to deciding to take a breach of deposit claim to the small claims court you should carefully consider as to whether it really worth doing so. This is because it can end up becoming a costly affair, and you are also limited to the amount that can be claimed for. This is up to £10,000 in England and Wales, but in Northern Ireland and Scotland, this reduces to just £3000. The court will also require you to have taken action elsewhere in order to resolve the problem.