Help for landlords with bad tenants: our experts advise

Help for landlords with bad tenants 1

We know that serving an eviction notice is never easy for a landlord. Even the most straightforward evictions can cause stress and anxiety for both landlord and tenant. But the eviction process could become considerably more complex if - and when - the proposed Renters’ Reform Bill is finally voted into law.

During the recent political upheaval - which saw LIz Truss voted in as Prime Minister, swiftly followed by her resignation - doubts were raised concerning the fate of the promised new reforms. However, a government research briefing published on 24th October confirmed that the reading of the Bill is still scheduled to go ahead.

Under the new laws, Section 21 of the Housing Act 1988 – which permits ‘no-fault evictions – will be jettisoned. The new legislation will instead allow tenants to stay on indefinitely, provided they do not breach their tenancy agreements.

In 2021/22, Londoners saw an 81 per cent rise in no-fault evictions. While the proposed legislation is undoubtedly good for tenants, the changes could create challenges for landlords.

Here we examine what landlords can currently do when dealing with problematic tenants. We’ll also look at what you can expect when the new Bill becomes law.


What are the signs of a bad tenant?

Help for landlords with bad tenants 2

The words ‘good’ or ‘bad’ can be highly subjective, but generally, if your tenant is doing one or more of the following, you have a problem:
Not paying rent, or regularly making late rent payments

  • Damaging the property - either deliberately or through negligence
  • Failing to take care of outdoor spaces they have signed up to manage
  • Carrying out illegal activity on the property
  • Causing disputes with neighbours, or disturbing neighbours
  • Keeping pets at properties where a 'no-pet' clause appears in the agreement
  • Allowing extra people to live permanently at the property
  • Sub-letting the property without permission

Very often, problem tenants won’t be first-time offenders and that’s why it is vital to follow up all references when you are taking on a new tenant. These days sophisticated screening services are available to carry out background checks.


First steps

Help for landlords with bad tenants 3

If your tenant is causing problems, the first thing to do is simply talk to them. Try to resolve the situation if possible, for instance, by setting up a rent repayment plan.

Always follow correct procedures, even though the tenant is not holding up their side of the agreement. For example, don’t be tempted to abuse the rights of a landlord to enter a property by turning up unannounced.

A lot of problems can be avoided by having a well-written lease. The lease should clearly set out basic rules and maintenance expectations. Wherever possible, swap legal jargon for plain English so the requirements are easy to follow.

A detailed move-in inspection, carefully documenting your property’s condition, should be carried out before the tenant moves in. Take time-stamped digital photos and videos of everything, from walls to kitchen units to sanitary ware. This makes it easier to present your case in the event of damage.

Make sure your tenant’s deposit is protected in one of the three official deposit protection schemes registered in England and Wales. If you do not, and your tenant takes legal action, the court could compel you to protect the deposit, issue a fine or rule that your tenant has the right to stay on after the tenancy agreement ends.

It probably goes without saying that you should also conduct regular inspections as the tenancy proceeds. But don’t forget to give tenants adequate notice of inspection dates.


How to report bad tenants to credit bureaus

Tenants who want to maintain a good credit rating can now link their rental payments to leading credit bureaus such as Equifax and Experian. Equally, landlords can report missed payments to the same organisations.

To register, you will need to provide personal information together with your business details. Once you have signed up, you will be able to report any late or missed rent payments.

Most tenants will be keen to maintain a high credit rating. The knowledge that they may be reported if they default could be enough to keep rent payments coming in on time.


How can a landlord evict a bad tenant?

Help for landlords with bad tenants 4

In England, you will need to follow different procedures for eviction, depending on the type of tenancy agreement you use. Currently, you must give at least two months’ notice for an Assured Shorthold Tenancy (AST), but the period can be longer for different types of tenancy.

When can I issue a Section 21 or Section 8 notice? A Section 21 notice can’t be used during the term of the tenancy, only if your tenant won’t move out when the fixed term comes to an end. Section 21 can also be issued when a fixed term tenancy rolls on to become ‘periodic’ (a tenancy with no fixed end date). Currently, landlords do not need to give a reason for eviction.

If the tenant has broken the terms of their agreement, this calls for a Section 8 notice. Under Section 8 a Landlord must appear in court and argue their case to regain possession. In pursuing Section 8 you may need the services of an eviction specialist or solicitor to bring about a successful eviction.


What will evictions look like in future?

Under the proposed Renters’ Reform Bill, all assured tenancies, or assured shorthold tenancies, will become periodic tenancies. A landlord will only be able to evict a tenant under reasonable circumstances, which will be defined in law. This might include needing to sell the property, or a landlord having to remove their tenants in order to live on the premises themselves.

In order to make it easier for landlords pursuing legal routes, the government has promised to speed up court proceedings. boost mediation services and improve on current grounds for possession.


Hiring a Property Manager

We all lead busy lives and you may decide that you need some help with the tasks and responsibilities that flow from being a landlord. So how should you go about finding a good Property Management Service?

Always look out for a company with a strong reputation. Ask friends and colleagues for their recommendations, explore online reviews and, if possible, visit managers’ offices in person to get a feel for how they operate.

Check out the full range of services they offer. The point of employing a manager is to leave you free to get on with your life, so the more responsibilities they can take on, the more you will be able to relax. A good management company should take care of everything, including tenant screening, advertising, maintenance and legal compliance, as well as all the paperwork.

When you are interviewing prospective managers, don’t forget to ask about their marketing activities.

  • Will they take high quality photos and videos of your property?
  • Will they list it on the leading property portals?
  • Do they use social media to maximise exposure?
  • And do they have established networks - both nationally and globally - they can use to attract the widest possible audience?


How do I keep up to date with new lettings laws?

There are plenty of online sources – including the official government website - to help you stay up to date with laws that affect landlords. But be aware that the anticipated changes (which will be voted on in parliament no later than May 2023) herald a huge step-change in lettings legislation.

If you would like advice on becoming a landlord or help to find a tenant for your rental property, why not get in touch with our prime london estate agents? We also offer a comprehensive Property Management Service to maintain your rental property in perfect condition.

Sign up for London property listings before they appear on Rightmove or Zoopla