My tenants have flooded my property but who’s problem is it?

I'm super cautious Paul but thanks for asking the question. Before I even came up with the name Property118 for this website I had already started blogging. Your question is answered in my first ever set of blogs where I documented my property investment strategy. My answer to the question you have just raised is in this blog >>> http://www.property118.com/?p=896

Yes just read it and I think it is still a maxim for any small business to ensure they can stay afloat when there are 'issues'.
That maxim is , cash is king....or queen.
Liquidity or access to guaranteed liquidity is a fundamental requirement of this game.
Too many people, and I am one of them are unable to or do not have the ability to achieve the ideal levels of liquidity.
Essentially one hopes to earn sufficient so that you can self- insure against problems, hoping they don't occur before you have an ideal 20%.
unfortunately if people waited for ideal situations to occur mor than half existing LL would never have entered the game.
Ideals are what the word states ideals!!
Very few little LL can afford the ideal at the outset of thier property owning journey.
Risks have to be therefore taken and fingers and everthing else crossed until one reaches that happy state of equilibrium where one has 20 % of liguid funds per property owned.
Of course once having achieved such a 20 % status the temptation would be to use those funds for some more property purchasing.
How does one stop oneself from using all those lovely dormant liquid funds for further expansion of one's property portfolio.
Easy to get rid of the sensible head and see all that lovely liquid moolah ripe to be used for further property investment.
Perhaps that is where a sensible mother might come in handy, to effectively advise, just say NO!!!?
Difficult one though eh!...isn't it!?

Hi Paul, "dormant liquid funds"??? NEVER! I also wrote a blog called "How I maximise the returns on my liquidity fund back in December 2010 >>>
http://www.property118.com/index.php/maximise-returns-on-liquidity/

Hi Mark Shout scream and hollow inside about how unfair it is yes .
But then take the emotion out of it and pick up your calculator. The calculator is your friendIts 15% yield!!!! Dont you dare sell it will say. The calculator speaks the truth. £575 it will cost you Thats only £1.57 a day for a year. You can handle that. Your yield is now down to about 14% for one year only. Keep it!!!
Youve had a bad day at the office so put it down as sunk costs erase it from your memory and go and enjoy a beer and chill. You may have 20 bad days like this a year but remember the 345 good ones when it all goes to plan. Dont waste too much of your time worrying about the ethics morals of it all. It sucks yes but business is not always a fair and level playing field. Its a team game though. Your other properties will rally around and support you in this time of need. Play the long game. Mines a Budweiser please.....

I'm not ready to give up on recovering the money yet Jonathan but rest assured I will not be kicking the tenant out or selling up based on one set back. The Budweiser is a great idea, yours is getting warm though so if it's OK with you I'll drink it when I've finished mine if you don't get here in time. Cheers mate! LOL

Yeah, here, here, sometimes one can get wrapped up in detail when one should really not be too concerned if you can resource the big picture.
It is damn irritating though but you're right Johnathan you cand spend more than the losees down the pub over a year.
Relatively peanuts as you correctly state.
Just nobody likes somebody getting one over on them!!
But I am sure in Mark's case the swings and roundabouts will counter eachother so that he can ultimately enjoy a nice pint down the local without being wound up about it.
Easy to say as I feel the same indignation as Mark but Johnathan you are correct.
We need to step back and not take things so personal.
After all, it's only business!!

Mark - am I now a Disqus devotee?!!
Tenants "claim" to have spent £575 Mark? Just ask for the invoices for the work and materials then. While at it ask for a written statement from their contractor that it was a definite failure in the system which caused the problem - and thus made it your liabiity under 1985 Act s11
The tenant may not object to the deposit being used, but remember they originally said it was not their fault or cost. Odds are they are thinking they spent this money and will recoup it from missing the month's rent. Stands to reason soon as you try to use the deposit to cover that month they will object. Real can of worms here to as you will be claiming it is purte rent arrears but they'll spin a vastly different story linking it to repairs and your failure to repair.
And no matter what the tenant will or will not allow, what will the Scheme Rules allow - and the Law of course.
Your client account Mark - describe it to me, how it is so designated and what the bank does to so designate it. As there are specifics needed beyond the cheque book and statement saying CLIENT ACCOUNT on them - that doesn't count for anything (well a very small hill of beans then!!) and you have to go much further to have a true client account. Email me separately if you prefer
Mind even then you can still disappear with the money in it.

with hindsight your mistake was ceding control of the repairs to the tenant without agreeing any ground rules.

"Disqus devotee" hey? Well that is a turnaround 🙂

I'm drafting an email to my brother as he took the call and he will forward it to the tenants. I may even publish it here and also their response (names and other identifiers removed for obvious reasons of course). I will also publish the response.

Just to explain, my brother "manages" all of the properties in the "Alexander Family Partnership". What I mean by that is that he's the first pointy of contact for tenant liaison. We all like it that way as we can put distance between ourselves and our tenants when required, my brother is also a VERY good mediator.

I would bet a £1 to a penny that my tenants will not have used contractors certainly not the type that issue invoices and provide receipts anyway. I reckon I've got a better than 50/50 chance of making them see reason and go along with my suggestion though. They may not be the sharpest tools in the box, they may be a rough family but they do respond well to polite reasoning.

Regarding the "clients account", I totally take your point. Like all landlords using an insurance backed scheme I could simply withdraw the money and do a runner regardless of what the account constitution might be. Do bear in mind though, iAmALandlord, NOT a letting agent. I prefer the insurance backed route as I feel as though I'm in control. It may well be that it's a false economy and I ought to go with the custodial scheme but I'm in good company of 10's of thousands of other landlords with this train of thought. If my properties were in Scotland of course I'd have no choice but use the custodial route if I wanted to take deposits.

Oh I do love my tenants. Totally unrelated story, not worthy of an article of its own at this point, but I thought I'd mention it. The men in shiny suits will never teach a landlord what to do in this situation. Extract from an email from a tenant (received just minutes ago).

"I'm having trouble with something creating tunnels in the garden (both the front and rear) and damaging the grass which I think it's a Mole animal, I remember these holes were existed in the garden at the beginning of our tenancy. My adjacent neighbor advised me to remove it as it might affect on the underground gas pipes. So I want you please to help to get rid of whatever is harming the garden. Please give me a call before coming to make sure I am at home."

I might have to put the rent up if he's got an extra tenant living there! And whose going to pay the referencing fees? LOL