INTERVIEW: How to reduce the chance of having to evict tenants

Nobody enjoys evictions – tenant or landlord. But they are a fact of the property business. Eviction specialist Nick Gordon helps us reduce the chances of needing to carry out an eviction and how to handle the process if you do.

Nick Gordon: Evict A Tenant

Evictions – the very mention conjures images of drawn out court battles, sour relations, trashed properties and mounting rental arrears. Add to that the fact the more reliable Section 21 route could well be being scrapped leaving us with the more arduous and all together less certain Section 8 route. While nobody gets into property expecting to have to, or indeed wanting to, boot out tenants, chances are if you are in the game long enough you will have to serve a notice at some point. With soaring rents, the cost of living crunch and government flip-flopping squeezing affordability margins for many tenants it is likely that day could come sooner rather than later.

Evictions specialist Nick Gordon, from Evict A Tenant, thinks there could be a wave of evictions coming down the pipeline. “The past two months, we’ve absolutely gone through the roof in terms of serving notices. So, I know in November and come December with the ones that we’ve just had in this massive surge, they’re going to be wanting to be instructed,” he says, referring to the next stage of the eviction process.

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This is not meant to scare. But it is the market in which we operate and, as with anything in life and property, you have a choice, you can sell up and get out or you can skill up and hold steady. Ambitious property investors can even see it as an opportunity to get some deals as some landlords head for the exit.

VET, VET, VET!

Gordon, a property investor himself, says he wouldn’t let the prospect of evictions put him off investing and advises other investors not to. He does however have some important words of wisdom.

Firstly, vetting tenants could not be more important including obtaining references, sources of rental and deposit funds, annual income and more. “Do your diligence checks on the tenants - as much information on them as you can get,” emphasises Gordon.

Still, it is easy to lie or provide false documentation to a landlord so the next step is to get them reference checked by a professional company who be able to assess the affordability of the rent for the tenant, check bank statements, contact employers, find CCJ details and more. It could well prove a false economy to skip this step.

YOUR REQUIREMENTS: TAKE NOTICE

So, you’ve whittled down the list, sieved out the time wasters and referenced your prospective new tenant. The hard part is over.

Well, not quite. For self-managing landlords, if you do not set the tenancy up correctly and provide the right documents any later eviction could become much more challenging and potentially expensive.

“The most common slip-ups I see is [landlords] just not having the paperwork in order – for instance, making sure the gas safety is provided on time. Making sure that EPCs are in place and you provide the How to Rent guide,” notes Gordon.

“When we do an eviction, sometimes the key element is having something as simple as a one-page checklist that the tenant has signed to say ‘I’ve received this,’ ‘I’ve received that’. That saves so much headache when we go to court. It’s unbelievable. Just that one piece of paper.” (See panel The NRLA’s checklist)

TENANTS NOT FRIENDS

An average eviction will cost in the region of £1,000- £1,400, explains Evict A Tenant’s Gordon not including rent arrears. On rare occasions though, if it goes to trial and the tenant is on legal aid and puts up a defence it can cost much more.

As well as being aware of all of your responsibilities as a landlord (even if you employ a managing agent) having a professional and not overly familiar relationship with tenants is best, Gordon advises.

“I’ve had a case where the landlord bought a tenant a car because they wanted to get back on their feet for work, so they bought them a car even though they were in arrears at the time!”

“You just got to see it as ‘I am your landlord, you’re the tenant. Contact me if there’s any issues but rent’s got to be paid on a certain date and that’s it,” says Gordon, adding that carrying out regular inspections, is not only vital to catch any issues with the property early but also an important part of underlining that professional relationship.

ACT FAST, BE DECISIVE

Believe it or not, eviction specialist Nick Gordon says he has had cases brought to him where a landlord did not realise or did not chase rental arrears for two years! Do not be that landlord.

Part of treating it like a business is keeping track of payments due and he advises reminders should be sent straight away when rent payments have been missed and then suggests a formal demand letter sent and recorded on day seven. Such correspondence can often be more effective when sent from an eviction specialist, says Gordon.

“I know we’re selling our services, but it comes stronger from a third party,” he says. “When they see [the letter] saying, ‘Tenant eviction’ or ‘Tenant eviction specialist’… It does alert a tenant to say ‘Crickey, I need to do something about this!’”

While some landlords will opt for online portfolio management software to keep track of rental payments and alert them to arrears, having a separate bank account for rental income and at the very least monitoring your portfolio income on a spreadsheet with diary reminders is important to keep track. It also really helps when it comes to presenting a specialist like Gordon with the details they need should a notice be required.

ACCEPTABLE RISK

Whether or not you are put off by the risk of having to someday go through the eviction process is very much a personal choice and down to your risk profile. With the potential abolition of Section 21 and Gordon’s lack of faith that already stretched courts process can be improved in any meaningful way, it is not a decision to take lively.

However, evictions are still comparatively a rare occurrence for portfolio landlords and by establishing a tenancy correctly, ensuring you are a compliant of all rules, maintaining a professional relationship with tenants, proper record keeping and staying on top of rent payments you can minimise the chances of it being a regular and arduous part of your property investing career.

WHAT YOU NEED TO PROVIDE

The National Residential Landlord Association lists the following items that are required to be provided at the outset of an assured shorthold tenancy:

• A valid Gas Safety Certificate if you have gas appliances.

• The current Energy Performance Certificate, unless your property is rented out as individual rooms.

• A current Electrical Installation Condition Report for the property.

• The latest version of How to rent: The checklist for renting in England

• A smoke alarm fitted on

every floor used as living space. These alarms must have been checked to show they are in working order at the outset of the tenancy.

• Confirmation that carbon monoxide alarms are fitted in every room with a fuel burning source. They must also be checked to show they are in working order at the outset of the tenancy.

• Confirmation that the deposit has been protected if already paid.

• Confirmation that the prescribed information for the deposit scheme has been provided to the tenant and anyone who has paid towards the deposit.

• A privacy notice outlining how the tenant’s data will be used.

• In addition to this, you need to check the right to rent status of any occupiers of the property.