Member Article

Landlords urged to guard against severe arrears

Property experts are warning landlords to be more vigilant than ever to protect themselves against severe rent arrears.

The recently published Tenant Arrears Tracker, published by LSL Property Services, highlights a worrying rise in the number of tenants who are more than two months behind on rent payments.

In the first quarter of 2013, the figure rose from 90,000 to 94,000 – which equates to 2.3 per cent of tenants in England and Wales. This has caused great difficulty for landlords, with more and more property owners seeking legal advice.

Joe Davison, of Paul Crowley & Co Solicitors, said: “We are seeing an increasing number of landlords who find themselves in difficulties when their tenants are in serious arrears. There is no easy way out, however there are some steps which will minimise trouble.

“First, we would recommend that landlords do their homework properly. It is surprising how many landlords neglect to obtain full, trustworthy references for their tenants. If a prospective tenant can not provide two worthwhile references, then it’s best to leave the property unoccupied until the right tenant comes along.”

“For extra security, run some light background checks and get the tenant to put up a guarantor. These measures do not require as much effort as you may think and can be vital in protecting your assets.”

“You can never be too safe though, and I’d also recommend issuing a section 21 notice as soon as the tenancy begins. Though hopefully you will not need to use it, it can save vital time later on.

“If you wish to begin proceedings following an arrears issue, the Law is very tenant-friendly. The only way of evicting a tenant with arrears is through an Order of Possession, a process which can take months from start to finish.”

“Section 21 requires two months’ notice before proceedings can begin. By taking one out when the tenancy commences, it saves issuing one when the landlord realises it is necessary and then having to wait two months before legal action can be started. The only downside is that it can only take effect once the Assured Shorthold Tenancy has expired. Essentially, it is a future insurance policy – hopefully it will not be needed but, if it is, you have it to hand.”

For further information or property advice, please contact Paul Crowley & Co Solicitors on 0151 264 7363, or visit www.paulcrowley.co.uk.

This was posted in Bdaily's Members' News section by Thomas Merton .