Considerations For Landlords - Part 4 What Do You Do When Things Go Wrong?
Being a landlord is not all about an expanding an empire and creating a lucrative investment. Sometimes it can go wrong and cost money. There is always the small chance that you take on someone who transpires to be an unscrupulous tenant who believes that housing should be free! However, by following the simple steps listed in the first of this series, your losses may be minimised.
Under the Housing Act 1988 it is a mandatory term that all tenancies created are assured shorthold tenancies and must have security of tenure for at least 6 months. This means that even if the tenant defaults on the rent during this first 6 month period, you cannot regain possession of your property until the 6 months has elapsed.
So what do you do?
Unless an agreement can be reached swiftly for the arrears to be paid up notice should be served as soon as a tenant defaults. This will minimise the amount of arrears that can accrue from thereon as well as providing you with the option of taking steps to obtain possession at the end of the notice or not. If not, then a new tenancy agreement will need to be created as the old one will have expired.
If notice is not served upon the initial default you could find that you get to the end of the fixed term, the tenant defaults and you have to wait a further two months during which time the rent is not paid before you can take steps to evict.
Unless you are certain, advice should always be sought as to the appropriate notice to be served. Notices are technical beasts and the slightest inaccuracy can mean it is invalidated resulting in further delays, arrears and expense, taking a chunk out of your income.
Once the notice has been served there is the option to take steps to gain possession at its expiry. Can you just change the locks? Generally speaking no! To do so, when the tenant is still entitled to occupy the property can leave you in a position whereby the tenant has a claim for unlawful eviction or could even amount to a criminal offence. In some circumstances it may be viable but advice should always be sought first. Instead there are a number of civil remedies that can be utilised:
- Application for interim possession order (“IPO”).
- Claim for possession under the accelerated procedure.
- Claim for possession.
- Debt recovery/breach of contract claim.
IPO's are very expensive and generally speaking are utilised in an emergency situation. They only provide a temporary remedy based on the fact that failure to comply with its terms may result in an arrest. A final hearing to recover possession must still take place. The accelerated possession procedure is the most utilised in my experience but may only be used where the circumstances allow it. These include the existence of a written tenancy agreement and no claims for arrears of rent or damages. The accelerated procedure is efficient, less formal and less costly. Where there are additional claims for arrears of rent or claims for damage caused to the property, the accelerated procedure cannot be used. The usual procedure in these circumstances is the third in the above list. There may be an alternative but this could mean an additional cost for a swift vacant possession and the ability to recover the arrears of rent or damages for loss and damage caused to the property whilst you re-let the property. Advice should always be taken as to the appropriate procedure.
Until the chosen possession procedure has been completed you are not entitled to possession of your property and sometimes, even where an order for possession has been granted and expired, your tenant may remain in occupation. In those circumstances, enforcement steps will need to be taken which will delay matters and cause additional costs to be incurred.
The above considerations are a general overview and should not be relied upon in any particular case. They are by no means exhaustive. The need for legal advice must always be considered. For further advice of information contact Marianne Johns on 01793 527141 or by email at mj@lemon-co.co.uk
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<p><strong><a href="http://www.lemon-co.co.uk/article_landlord-part4.php">Considerations For Landlords - Part 4 What Do You Do When Things Go Wrong? </a></strong><br />
Being a landlord is not all about an expanding an empire and creating a lucrative investment. Sometimes it can go wrong and cost money. There is always the small chance that you take on someone who transpires to be an unscrupulous tenant who believes that housing should be free! However, by following the simple steps listed in the first of this series, your losses may be minimised. ...</p>