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Buy to let or buy to lose? - Tom Crown, Chebsey & Co

Buy to Let or Buy to Lose…

I see more and more “normal” individuals approaching me as Landlords in difficulty, perhaps with multiple properties that they manage as a side line to their normal employment. They come to me in a mire. They rely on their rental income to run their properties but they have a Tenant that has stopped paying rent. He has been very honest, they have always been very honest, with them and they have given him some leniency because he had a second job or some further money due in the next few months. They are now down on three or four months rent and they want him out now. This is possible, but not necessarily immediately.

Possession Proceedings
The Landlord must embark upon a slow process whereby the Tenant must be given formal notification of the Landlord’s intention to take eviction action. There is of course a delay of many weeks allowed for the Tenant to absorb this notice. If the situation remains unchanged, the Landlord must then throw himself at the mercy of an overstretched and underfunded courts where his claim for possession will creak slowly through a system that is wide open to abuse from callous tenants.

Tenants’ Rights
In a nutshell, Tenants will sit tight while Landlords wait for their money.

If the Tenant even has an inkling of his rights, he may not budge until the day the bailiffs arrive (Guess who pays for the bailiffs and locksmiths). A Landlord who has been unlucky in his experiences with the casino that is court timetabling will now be 6 months down on his rent.

Recovering Rental Arrears
What happens to those 6 months of rent arrears, better known to Landlords as mortgage payments, service charges, council tax etc etc? They all get wrapped up into a neat single figure CCJ: a piece of paper which the Landlord must then enforce at his own costs against a potentially unemployed, potentially untraceable and definitely unethical individual.

This law is an ass! The reality is we have a system that is not serving the common good. But it is clear. It is concrete.

How good can a Tenant Relationship be where the Tenant has stopped paying rent?
Even where there is a long relationship of trust and the Landlord has every hope that his Tenant will come through, the Landlord must serve every notice he can as soon as he can. A Tenant with any grasp of the real world will understand the Landlords position. There is no threat to the Tenant. The Tenant is not going anywhere in a hurry. If a Landlord has a genuine fear that serving a notice requiring possession only if the rent is not paid will encourage his Tenant not to pay the rent and face a CCJ and its associated consequences, then my argument will always be that this Tenant is not worth keeping in any event.

Landlords will be well advised to watch their backs...

Thomas Crown

Tom Crown is a Solicitor at Chebsey & Co and can be contacted at Chebsey & Co, 51 London End, Beaconsfield, HP9 2HW www.chebsey.com Tel; 01494 670440

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