Problems with tenants?

/ Landlords

Guest Blog by Neil Andrews*

Today, providing you have the permission of the freeholder, most blocks will allow long lets of six months or more. However, it’s important to remember that if you let your leasehold property, you are still the person responsible for ensuring that the terms of the lease are met.

So, if you have a tenant in your leasehold flat and they misbehave, breaching the terms of the lease, the buck stops with you.

In law, you will always be responsible for the behaviour of your tenant. Your block landlord (the freeholder) can pursue you for the consequences – and costs – of any misbehaviour of your tenant, whether you have made your tenant aware of the rules for the block or not.

Your block landlord has no contract with your tenant, and will expect you or your letting agent to take action to get the problem remedied and cover any costs involved.

However, you can only claim against your tenant if the tenancy agreement contained the same conditions that are in the lease, and an indemnity for failing to observe the conditions set out in the lease. 

Rent arrears

This is probably your number one worry, but a well managed molehill need not become a mountain. Two months’ rent arrears for an assured shorthold tenancy will often give you an automatic right to a Possession Order. (Source: https://www.gov.uk/guidance/gaining-possession-of-a-privately-rented-property-let-on-an-assured-shorthold-tenancy)

The Government’s Possession Claims Online Procedure (PCOL) is available to you and is relatively inexpensive. You will generally get a hearing date which will be not less than 28 days and not more than eight weeks.

However, until you get a judgment, you should bear in mind that, irrespective of whether the agreed payments are being made, you have a legal obligation to ensure that you honour your side of the arrangement. Only a court can end a tenancy agreement on the basis of non-payment. So, you will want to sort matters out as quickly as possible.

As soon as a rent payment is late, speak with your tenant or have your letting agent speak to them. If they are able to make the payments then discuss appropriate payment plans. If not, discuss their intentions.

If your tenant wishes to end the tenancy early, and you are agreeable to this, just be careful not to do anything that can be construed as pressurising tenants into agreeing to end a tenancy. This could be perceived as harassment and or illegal eviction, both of which carry criminal sanctions.

If you have concluded that negotiation and payment plans are not going to be an option, and rent is in arrears for two months or more, then you can serve a possession notice, using the online service if you wish, or ask your letting agent or a solicitor to handle it for you.

Bear in mind that the criteria for seeking possession under the two month rent arrears threshold applies to when the notice is served and when the case is served.  It means your tenant must be in arrears for the full rental amount for two months prior to notice being served and also two months prior to the case being served.

A savvy tenant might just pay enough to bring themselves as little as £1 under this two month arrears threshold, and keep doing it again and again.  If you are that unlucky, you really should consult a solicitor in person or you will never get any arrears back!

There’s no foolproof way to completely avoid “can’t pay” or “won’t pay” situations, but good tenant referencing, good letting agencies, and just following your own gut instinct probably go a long way towards it.

* Neil Andrews is a Partner at Coles Miller LLP. For more information about property matters you can contact Neil on T: 01202 355695 E: nandrews@coles-miller.co.uk

The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this article, we have relied on information sourced from third parties and we make no claims as to the completeness or accuracy of the information contained. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Deacon accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.

FP399-2017