Becoming a Landlord

There are a number of things to consider when becoming a landlord. What references do you need when choosing a tenant, and why? What are the pros and cons of using a letting agent? If it doesn't work out or if you want your house back, how do you evict your tentant? And how do you make sure you are up-to-date with the latest legislation, so you don't accidentally fall foul of the law?

Getting the right tenant and referencing

It is always advisable to carry out reference checks and financial checks - i.e. whether they are employed etc - so that you are more likely to get a tenant who can pay their rent and avoid the future cost of having to evict them through the courts. Although the court provides for the landlord to get their costs for possession proceedings back from the tenant this often does not work out in practice as a tenant who cannot afford to pay their rent is unlikely to have any money, so pursuing them for rent arrears and costs is a pointless endeavour.

Also obtaining character references and previous landlord references means you are more likely  to get a tenant that will respect the rental property, not causing damage and ensuring that day to day care of the property is maintained.

The pros and cons of using a letting agent

The pros of using a letting agent are:

• They will find a suitable tenant for you by caring out the requisite checks themselves
• They should also be able to keep landlords up to date on changes in the law affecting them and their tenants. 
• The letting agent will often provide a Assured Shorthold Tenancy Agreement for you that is compliant with the law and also considers the landlords specific needs such as whether they require a break clause.  
• They will often draft S21 notices and S8 Notices but caution should be considered here as if these orders are not completed correctly they can be invalid, if is often advisable to approach a Solicitor to assist with these especially S8 Notices if court proceedings are contemplated if the tenant does not leave.  You cannot use this route to recover rent arrears.

The cons are the fees the letting agents charge for their services.

How to legally evict a tenant

If you want your tenant to leave at the end of a fixed term period on an Assured Shorthold Tenancy Agreement you must serve an S21 Notice under the Housing Act 1988, giving at least 2 months’ notice. The notice period however will depend on the type and duration of the tenancy. If the tenant does not leave then you can issue accelerated court proceedings, a hearing is not needed to obtain an order for possession giving a notice period of generally 14 days for the tenant to leave.  If a tenant refuses to leave after the possession order is obtained the bailiffs will have to be instructed to evict them.

If a tenant falls into rent arrears a landlord need to serve an S8 Notice  under Housing Act 1988, the notice period given in the s8 Notice to the tenant is 14 days, if they do not leave after this time then possession proceedings can be issued. This procedure is most commonly used for rent arrears which is a mandatory ground for possession. There are mandatory and discretionary grounds, the most likely to succeed are mandatory grounds.

There are problems with Section 8. Unlike the S21 route, if successful S8 can give a landlord both a possession order and a money order for arrears of rent without separate hearings, but if possession is the landlord’s priority they may not achieve this. In the case of rent arrears (Ground 8) a tenant can undermine the landlord’s claim by paying off some of the arrears. The tenant may also claim that repairs have been requested and not carried out or that you have been harassing them.

Where tenants are able to gain the sympathy of a judge he or she may grant a suspended possession order. This gives the tenant time to “mend their ways” and comply with the terms of the suspension, in which case the possession order will not be enforced. It is also possible with the S8 route that the tenant can bring a counter claim, for example for defects in the property.

A Landlord needs to consider carefully which route to use – the length of time the tenancy has still to run will be a big factor here. For practical purposes it may be more cost effective and less of a risk in the long run to await the end of the term and to take the greater certainty of the S21 route. This can be better, even if it is necessary to take further action later to recover rent arrears and dilapidation costs etc. S8 procedure can also be used for anti-social behaviour. It is very important that landlords use the correct procedure to lawfully evict tenants as failure to do so can result in very steep fines in violation of the Protection from Eviction Act 1977.  If landlords are unsure which notice to serve or what procedure to use a solicitor should be contacted to look at the documents and facts and advise you accordingly. 

Keeping up with changes to rules and regulations

Letting agents should keep landlords up to date with changes in the law and new rules which apply to them.

If landlords decide not to use a letting agent, the gov.uk website provides information on what is required of landlords in the private rental market. Documents, forms etc can be downloaded from this website. It can also keep you updated as to any changes in the law etc.

Looking ahead at new laws/rules that will affect landlords.

The most relevant matter at present is that as from the 1st April 2018 there will be a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). The regulations will come into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches. For most landlords this will mean that they will no longer be able to rent out a property with a rating of F or G after April 1st 2018. As such landlords with properties in this EPC bracket should begin preparing now for April 1st. “