A Landlord Solicitor’s Guide on How to Spot Potential Bad Tenants
Tenants will get increased tenant rights when the Renters’ Rights Bill becomes law. Some London landlords are issuing Section 21 notices and selling up because they fear the legislative changes will leave them with bad tenants and they won't be able to evict them.
In this blog, our Landlord and Tenant Solicitors offer guidance on how landlords can spot potential bad tenants before entering into a tenancy agreement. The guidance won't guarantee that you won't end up with a tenant who doesn’t pay their rent or behaves antisocially. However, in those scenarios, the new renters' rights legislation still gives landlords the ability to go to court for an eviction and possession order.
Online and London-based Landlord and Tenant Solicitors
For landlord and tenant advice call the experts at OTS Solicitors on 0203 959 9123 or complete our online enquiry form.
Spotting bad tenants because of fears about the Renters’ Rights Bill
The Renters’ Rights Bill will give around 11 million renters more rights and affect around 2.3 million landlords by:
- Providing renters with improved security of tenure
- Imposing better rental property standards
- Offering tenants protection from rogue landlords
What the Renters' Rights Bill doesn’t do is give tenants free rein. The Bill may end no-fault evictions and Section 21 notices and also change the grounds for a possession order but the Bill still enables a landlord to regain their property if a tenant does not pay their rent or, in some situations, where the tenant is in breach of their tenancy agreement.
Fear of the contents of the Renters' Rights Bill is making some landlords forget that even now a landlord must go to court to obtain an eviction order and possession order. Whilst the Renters' Rights Bill gives tenants more protection from landlords who don’t maintain their rental properties it still provides legal routes to evict bad tenants.
Who is a bad tenant?
When landlords talk of ‘bad tenants’ it's important to be realistic. Sometimes a tenant won't be able to pay their rent on time. That doesn’t make them a bad tenant if there is a sound reason for it and they communicate and work with you to sort it out. If the tenant’s child breaks a window that’s equally OK if they agree to fix it and it doesn’t happen every week. What our Landlord and Tenant Lawyers are getting at is that sometimes landlords have unrealistic expectations of tenants and too quickly label them as ‘bad.’
As specialist Landlord Solicitors in London, we are sometimes told a landlord has a bad tenant when all the tenant is doing is standing up for their rights. For example:
- Reporting mould or other problems in the home
- Asking for a gas safety certificate
- Refusing to allow access for an inspection without first receiving notice
Equally, tenants can have unrealistic expectations of their landlords. Many tenants have never been homeowners and don’t understand how hard it can be to get a plumber or electrician around to sort out a minor repair or the problems of getting a tradesperson in London to stick to an agreed appointment. Traffic and a whole combination of factors can create tensions between landlord and tenant but they don’t necessarily mean that the tenant has a rogue landlord.
How to spot a potentially bad tenant
Here are a few of our ideas on how to spot a tenant who may not be ideal to let your property to:
- 1. Friends of friends and distant family – don’t assume that friends and family don’t need credit checks or references just because they are friends of friends or family or because you believe that although they were evicted from their last rental property, they will treat your property with respect or pay their rent. The best advice is not to rent to friends or family without first doing the same checks you would do for any other tenant and having a tenancy agreement in place. Alternatively, you should only rent to friends of friends or distant family knowing that they may be a potentially bad tenant but do it because they are friends and family and you can afford to not get paid the rent or to deal with the hassle if things go wrong
- Bankers, doctors lawyers etc – or anyone who says they are a professional person. On a serious note, some landlords can be swayed into letting property quickly to someone with a good job before their references are available or taking the doctor as a tenant in preference to the 30 or so other applicants for the property. Someone’s profession does not make them a good tenant
- Cash tenants – tenants who offer to pay cash in advance for a six-month let may be making that offer for sound reasons. For example, they are self-employed and so can't get a reference from an employer or they have sold a house and have cash in the bank to pay their rent but their salary would put you off renting to them. Unfortunately, other cash payers may offer you cash upfront because they want you to sign up for a quick tenancy agreement knowing that you won't be able to get them out of the property at the end of the tenancy agreement without a court order and understanding how long it takes to get an order
- You think the tenant may be a bad risk but there is a guarantor – a guarantor can ensure you get your rent but it is an added risk and complexity when you have 30 plus other applicants who may not have as good a job title or salary but may be a better tenant
- Picky vibes – a tenant has rights and is entitled to expect you to comply with your obligations as a landlord but there is a but. While most tenants pay handsomely to live in a rental property and should not be criticised for asking you to honour your side of the bargain, some don’t think it unreasonable to call in the early hours as they have accidentally locked themselves out or to withhold rent because your plumber did not treat a dripping tap as a plumbing emergency. If you get picky or entitled vibes then it is probably best to go with your gut feeling
- More to the story – sometimes something just feels off. For example, when you are renting out a five-bed property and the tenant says it is just him moving in. Alternatively, the prospective tenant may offer to pay more in rent provided you waive the inspection or change some other aspect of the tenancy agreement. Sometimes there is nothing suspicious but it is right to be cautious and to ask questions
- Check documents – when you have a downloaded internet bank statement, computer-generated wage slip, or employee or previous landlord reference it is easy to glance at them and say yes. Not all fraudulent documents are obvious but many are or they can be cross-checked by online references or by asking for a specific reference
- Letting agents – using a letting agent doesn’t guarantee you a good tenant but if you are a first-time accidental landlord, it can be a good idea to use a letting agent to find a tenant for you. That’s the case even if you don’t ask the agent to manage the tenancy agreement for you. Most agents have many years of experience in spotting potential problem tenants and have a reputation to uphold. If they are going to be managing the tenancy for the first six months or so then they won't want to have to deal with a bad tenant either
Does spotting potential bad tenants protect landlords?
Spotting potential bad tenants and not renting to them certainly protects landlords but however diligent you are a tenant can fall below your expectations. That might be because they hid something and you didn’t spot it or they began a relationship and your ideal tenant became the tenant from hell because the partner encouraged them not to pay the rent or their partner behaved antisocially.
Sometimes a tenant isn’t bad; just unlucky. For example, a tenant loses their job and is unable to pay the rent or their partner leaves them so they can't afford the rent and can't get local authority accommodation until their landlord gets a possession order and they are evicted and declared homeless.
Whatever the reason for landlord and tenant problems, spotting a potentially bad tenant certainly helps landlords as it can save thousands in legal advice and court proceedings by only renting to tenants who are unlikely to fall out with you because they will comply with the tenancy agreement and you will comply with all your landlord repair and maintenance obligations.
How a landlord can protect themselves from a bad tenant
Even the most experienced landlord or letting agent can pick a bad tenant. You can protect yourself from a bad tenant by:
- Insurance – consider taking out specialist landlord insurance to cover nonpayment of rent or to cover damage to the property
- tenancy agreement – make sure you have a signed tenancy agreement before the tenant moves in - even if you are renting to distant family, a friend of a friend or a work colleague. Ask your Landlord and Tenant Solicitors to tweak the tenancy agreement as necessary. For example, to bring forward the first inspection visit or to include additional terms
- Inspect and record – make sure the tenancy agreement provides for inspections and ensure photos and inventories are taken at the start of the tenancy agreement so you have evidence that the tenant has breached the tenancy agreement
- Keep communicating with the tenant – a landlord can think that a tenant is a pain and ignore them. That can backfire if some of their requests are reasonable or if you need evidence to get a possession order
- Speak to a Landlord and Tenant Solicitor before assuming you have a bad tenant as it may be a case that the tenant has some valid points. Alternatively, your Landlord and Tenant Lawyers can send a letter before action and get the landlord and tenant dispute resolved or start the Section 21 or Section 8 notice process quickly before the passing of the Renters' Rights Bill.
If you are concerned about a tenant or want general legal advice on the Renters' Rights Bill as a professional landlord or letting agent then our Landlord and Tenant Solicitors can help you with all your landlord advice needs.
Online and London-based Landlord and Tenant Solicitors
For landlord and tenant advice call OTS Solicitors on 0203 959 9123 or complete our online enquiry form.
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