Tenant With 2 Months Arrears – “Do what you like”!

I know this is slightly off thread but anyone starting out with Lettings should have at least six months costs, including mortgage interest, council tax, water, and an allowance for gas/electric as an ABSOLUTE minimum.

If you're struggling after one or two missed payments you're in the wrong business.

For small portfolios this should be per property.

Sadly a divorce allowed my ex-wife to raid these pots. But luckily they're nearly built up again.

I let high-end fully furnished apartments to corporate tenants but still take precautions including Legal Expenses cover even against FTSE-100 companies.

It's a choice as I could have more properties if I chose a different tenant profile.

Also if you're not incorporated, even as an LLP, you should keep Loan to Value ratios below 60% especially with the new mortgages stress test requirements for BTL mortgages.

If you're a higher rate payer it's unlikely, other than capital growth, you'll not make money at 70-75% LTV with all the other costs involved and considering voids.

Good luck with your tenants!

Reply to the comment left by "Ian Clifford" at "20/01/2017 - 20:51":

I have plenty of money for these eventualities, but that's not the point of what is going on here. Why should we have to always foot the bill for tenants who break their contracts and decide to live rent-free while we pay all the costs? Why should any business have to stomach being cheated by customers who take the materials and/or service and then decide not to pay for what they have taken? We should have protection by the law for this; something which we do not have at the moment.

Because Ros we have been demonised by the last two governments and people have believed the hype. Nasty profiteering landlords taking away first time buyers homes and making tenants pay over the odds for rents. That is the perception peddled by the press and governmnent as a form of political populism to gain votes. SDLT, Section 24 ( a firm policy favourite of yours I know) CGT discrimination, banning letting agent fees etc etc. We are seen as the Sheriffs of Nottingham and the tenants as Robin Hoods. But with your hard work and those of the Tenant Tax Rebel Forces we may well succeed against the Evil Tory Empire.

Reply to the comment left by "Dr Rosalind Beck" at "20/01/2017 - 20:55":

Hi Ros

Please don't get me wrong, you're 100% right and I'm with you all the way!

The war on private landlords is completely counterproductive but until the outcomes are seen in higher rents, lower availability of PRS accommodation in the light of exploding demand, along with UC/HB tenants being forced out of the PRS, then sense may prevail.

What really upsets me is the incentives offered to corporate investors to redevelop existing commercial property and building on brownfield sites. None of which will offer solutions to the real PRS issues.

The comment re: backup savings is purely directed at OP and new landlords!

Reply to the comment left by "Ian Clifford" at "20/01/2017 - 20:51":

Ian, I concur with Ros as to why should I have to pay for someone whilst someone is stealing from me? When I say that it is putting a strain on my finances, I am talking about the way I feel not how I am coping with it. I have been a Landlord for 16 years and own multiple property portfolio and most of tenants are good but I am feeling hard done by as Law is on their side.

My tenant has only spoken to once and then when I attempted to call her back she written in her text message "I feel I have been harassed by you". I stated, I am only asking for rent and you told me yesterday that, you will pay today. She responded the day is not over yet. At the end of the day, I tried to call her back she again sent me text message saying "This calling business has to stop as I can not concentrate at work, send me notice by email as I can not deal with you any further"

I sent response back and stated "are you paying me rent, yes or no" she then responded, when I am ready" I said, what time, when? She responded when I am ready.

I sent response back so this means you won't pay? She responded you said that"

I repeated can you confirm if you will pay yes or no? She said do what you like". I said can you confirm?? She responded I need advice from Council.

I said you still need to pay, she responded I will ask them (Council) to call you".

Since then she has not reverted back not a peep. Do you think this is fair that Law protects her on my expense?

Reply to the comment left by "Simon Hall" at "20/01/2017 - 21:54":

Hi Simon

Apologies as a newbie here, I confused a later reply from you (re: Financial Strain) with your OP.

I have nowhere near your level of expertise, nor was I aware of the size of portfolio!

I absolutely sympathise with you, the law is on the side of the tenants.

Until early last year I was a CAB volunteer, helping people, mostly genuine, about delaying evictions that were unrelated to rent non-payment. Another common issue was non return of deposits, often which turned out to be uninsured anyway!

That said I deplore people who game the system, like your tenant, and the proliferation of websites explaining how to game the system.

I live in area with a chronic housing shortage, PRS rents that are 50-60% below LHA levels. In the next town, Farnham in Surrey, LHA rents for a two-bed property are £795 pcm despite properties costing £350,000+ if you're lucky!

Those ex-council properties that are available at lower prices, are being snapped up by landlords then letting out as HMO's as the figures don't add up! Round here £500, often only payable in cash, will get you a room in a house, let alone a house or flat of your own!

All the changes from S.24, SDLT surcharge, upcoming ban on fees etc. are brewing into a perfect storm.

When Shelter and RICS agree on something, you know they must be onto something.

I have stopped expanding my portfolio, until at least the SDLT surcharge is repealed.

I love this site and the wisdom of its members, I have learned so much, and consequently avoided so many pitfalls as a result!

At the moment, I stick now to my niche (corporate tenants), as it works and is still profitable.

I just dread a recession as my tenants are mostly in Upstream Oil and Gas and we know how that's going!

Hi Simon, pay a solicitor to serve a section 8 and sanction 21 immediately....your be using the section 8 on the grounds of 2 months in arrears, a section 8 is much faster 2 weeks. However always serve a section 21 too. My rent guarantee insurance advises me to send both. I be made two successful claims. Using this method. Wait for your possession order. And than instruct the.court bailiffs, if she's not left on the date of the possession order. I would recommend collecting a deposit next time as the judge would have awarded this to you in full. And always buy rent guarantee especially for the first year at least until you get to know them and their habits . Don't make it personal. Just serve the correct documen. It can take 4 to 5 months to remove tham through the courts. Do start tomorrow. Use a solicitor thou don't try to do it yourself. It cost me £173 for both sections 8 & 21. I live in the south east...good luck...

Reply to the comment left by "Ian Clifford" at "20/01/2017 - 22:34":

Hi Ian.
Apology accepted on my behalf. I was concerned that we don't get into victim-blaming. On a separate point, you mention Shelter and RICS being in agreement - can you clarify that as I don't remember them being in agreement about anything? Thanks.

On the main point, I think Paul has some good advice - I didn't know it was that (relatively) cheap to get a solicitor to serve the sections, as my partner always does this, but it's a good idea if one isn't 100% sure about getting it right (of course Simon may be confident about this but others reading will be in similar situations and less confident).

On Simon's point about being accused of harassment for making one 'phone call, I have also experienced this - even accusations of driving past the house and looking in, in a van, when we don't have a van and deliberately didn't go near the house because we knew she was the type to allege harassment. The judge believed the tenant and wouldn't therefore order that she give us her forwarding address to serve the attachment of earnings on. If there is alleged harassment then the judge should ask for the evidence of this having been reported to the police and so on; but they don't. The way tenants get away with all this - with the system heavily in their favour - and then the likes of Shelter and Professor Danny Dorling saying that landlords have all the power and tenants none - is bloody annoying.

Reply to the comment left by "Paul Green" at "20/01/2017 - 23:16":

Hi Paul, thanks for this, it is a sound advice! I have already served Section 8 and Section 21 Simultaneously. Section 8 expires on 8th Of Feb 2017 and Section 21 expires on or around 15th Of April 2017. I have done it through Solicitors and it has cost me £100 fully inclusive of VAT.

Solicitor sent this via first class post and "Recorded Delivery" and I hand delivered copies with a witness. As expected, she did not sign "recorded delivery" and this shows on Royal Mail Tracker that it is in the process of being delivered.

http://www.landlordzone.co.uk/news/fergus-wilson-defends-letting-criteria-policy

Fergus Wilson's 11 point Criteria, I might adapt similar policy!:
The Wilson’s Letting Criteria ————————————— Letting Criteria from 1st January 2017 Like any business we are consistently fine tuning to best advantage. The following are not acceptable: 1) Tenants with children under 18. A child over 18 can be a co-tenant 2) Only tenants with a Rent Guarantee 3) No single mums or single fathers 4) No tenants on Housing Benefit 5) No low income workers 6) No single adults 7) No Zero hours workers 8) No plumbers 9) No battered wives 10) No smokers 11) No tenants with pets Both tenants names to go on the Tenancy! Take National Insurance. Take car numbers. Take details of employment. Fergus Wilson 27 12 2016 ——————————–