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Top tips to help minimise the risk and disruption for landlords

Tuesday 5th March 2013

The number of landlords seeking possession and the number of court orders continue to increase, according to the latest figures released by the government.

The data shows that there were 103,329 landlord claims in last year that led to an order for possession being made, which is the highest recorded rate over the last five years and represents a continuing upward trend.  It is estimated that between 67% and 80% of claims led to a possession order.

Consequently, LetRisks has compiled some tips to help minimise the risk and disruption for landlords:

·         As a landlord, you should always be aware that the tenant’s circumstances could change. If the tenant was to default, could you afford the legal costs and loss of rent for six months or possibly longer?

·         Some letting agents may ask a landlord to sign a disclaimer saying that he/she has been made aware of the risk and is prepared to either buy specialist cover or accept the risk and not benefit from specialist cover which is available

·         If the rent is late, don’t delay action.

·         Make sure you know what your agent is doing if the rent is outstanding.

·         Chasing the rent arrears – establish a firm rent chasing timetable including letters before legal action, telephone scripts, serving notices, among other measures.

·         Get the right tenant – work with a good tenant referencing partner and don’t cut corners in the checking procedures.

·         Is the Tenancy Deposit correctly placed? The changes in legislation under the Localism Bill take effect in April, and we have heard of solicitors acting for tenants on a no win-no fee basis to catch out landlords and agents if they haven’t complied with the regulations.

• Guarantors agreements – Ensure that you maintain up-to-date contact details for guarantors so that you can copy them in on all correspondence you send to the tenants regarding their late/overdue rent. This helps apply additional pressure to the tenants to pay.

• Is your letting agent’s procedure for serving Section 21 notices compliant? Last year it was reported that 70% of notices were thrown out of court because they were wrong. More landlords are relying on the accelerated procedure to regain possession. If the notices are incorrectly served, there will be delays and additional costs that the landlord may seek to recoup from their agent.

• Attitude to risk: You should be aware that if the tenant was to default, it takes approximately eight weeks from a possession claim being issued to an order being made – can you as a landlord afford this situation? A Legal Expenses and Rent insurance policy from a specialist supplier may be the solution.

• Know your tenant – maintain contact with the tenant, to establish why the rent is late or unpaid. It will improve your chances of a successful outcome.

• Making an insurance claim – contact the insurers at the earliest opportunity and follow their claims procedures.

LetRisks is a leading provider of specialist risk management and insurance solutions to the residential let property market, including tenant referencing services and specialist insurance for landlords and tenants.

              

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