Tag Archives: Assured Shorthold Tenancy

All That Glitters Is Not Gold!

As yet another marketing email drops into my Inbox extolling the virtual virtues of HMO ownership,  I’ve decided I can no longer stop myself from passing comment on the increased hype of HMOs.

The email came from an estate agent I sacked last year for being useless and, eight years ago, actually told me they wouldn’t touch HMOs with a barge pole.  Why then, did they send me and possibly a thousand other property investors on their target list, promises of glittering HMO yields?

The reason, I believe, must be this:  with the rise of online and high street letting agents all scrabbling to secure properties to let, margins are thinner as they compete to offer the cheapest headline service.  However, the fees to cover their operational costs (cars, staff, rates,) HAVE to come from somewhere so they divide and spread their costs.  Here are some examples of fees levied to the tenant and landlord before a let has begun: Continue reading

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How The Market Is Changing

From where I’m sitting, this is purely subjective of course. Having run HMOs for 7 years and I’d only planned to do it for 5 years, reckon I’m now a couple of years past retirement. The plan had been to squeeze as much yield out of them as possible, sell at a profit and do something else. As a plan it had strategy, goals and optimism but, in reality, it was nothing better than a property wealth creation course pie-in-the-sky unsubstantiated greedy wish.

Instead, thanks to the recession and divorce, I have a niche business, constant room demand, an appreciation of real life on minimum or no wage and a set of tenants whom I couldn’t bequeath to another landlord with a clear conscience (on both sides).

What do you mean The Market is changing?

From 2007-2011 every tenant which arrived on the doorstep came armed with a good sob story, housing benefit papers to sign, could be found on any benefit database under several addresses and, if I was really unlucky, on a few police databases as well. Apart from Paul and Andrew in recent times, everyone else has pretty much kept their nose clean (to my knowledge). I suspect a couple are up to some dodgy deals and workings but we need a few in society just to keep the police on their toes and prove we still have freedom of movement (Yes, I do believe Big Brother will be a reality in my lifetime).

Perhaps I’m getting better at filtering advertisement responses? Immediate “no”s are: Continue reading

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Why I Can’t Afford LHA Claimants Any More

Five years ago, the prime room rental market was students and people in receipt of Housing Benefit.  Put an ad in the paper and 9 out of 10 respondents were those on housing benefit – probably a key reason that so many fellow landlords stuck their nose up at me saying I was “mad” and “do you want to make life more difficult for yourself?”.

Housing Benefit vs LHA

I liked Housing Benefit claimants: they tend to stay longer, were satisfied with their environment and, as they were home much of the day, kept an eye on the comings and goings of the house.  Once you understood how the system worked, the claim process was relatively straightforward: upon production of landlord evidence of a room offer the tenant would approach our local Housing and Legal Aid Centre and a cheque for four weeks advance rent was made payable to the landlord.  The tenant would then fill in their part of the claim form and the landlord would fill in the other parts including their bank details for the benefit to be paid into.  We’d sit back, wait and within 4-6 weeks the rent was paid direct into the landlord’s account regularly.  If there were any queries, I’d call the Housing Benefit team (I knew each agent by their first name), find out at what stage the claim was at or if they were waiting for any more information so I could chase the tenant.

Under the LHA system, the process is no longer so transparent.  The tenant can make the claim, the landlord fills in what’s included in the rent and, even though the tenant signs permission for the landlord to discuss the claim, that is the last I’ll see or hear until the tenant hands over the money.  I’ve tried to chase a claim only to discover that the call centre had moved to Slough (nowhere near us) and, despite being allowed to discuss it, the staff couldn’t give me any information “under Data Protection” and “You’ll have to ask the tenant yourself”.  I want to scream down the phone “I bl***y well would if I thought I’d be getting a straight answer and was prepared to camp outside their room all night until they got home!”.

Why LHA Doesn’t Help Tenants

My tenants don’t mean to not hand over the LHA payment, but when their bank account is in the red, they have no mobile credit, possibly haven’t eaten for a while, eeking out their tobacco pouch so their roll up resembles more Rizla and saffron strands than a good smoke, I empathise with their temptation to hand over £150 rather than the £200 paid by the Council.  In their heads (especially if they’ve recently been working), 50 quid is easy to reimburse within the next couple of weeks.  Then the reality sets in that there’s no financial room to manoeuvre: skimming £20/£30/£40 off the LHA payment to cover the shortfall of Job Seekers Allowance means they end up £300-£400 in arrears before you know it and start to get stressed.   At that point, they do what most of us do when we get stressed – drink more, smoke more, blow whatever cash is available because, let’s face it, it can’t get much worse.  Their girlfriend/boyfriend, friends and parents are probably financially exhausted, they’re drowning in debt, despondent from hitting a job wall – so what if they fall out with their landlady on top?  Life is so chaotic we’ll string her along with a few well honed excuses that used to work on our mothers and teachers.

Greg is £500 in arrears and I don’t want to see him homeless but this is what’s happened to him.  When the process starts I meet with the tenant and explain that this is what will happen and, in order to avoid it, we have to work together.  I’ll happily reduce the rent to reflect the LHA payment provided that the LHA is handed over as regular as clockwork.  “Yeah, yeah, yeah, I promise.  It won’t happen to me and I’ll be working again soon.”  I’ve experienced this time and time again.  The most common excuse is “Housing have messed up my claim AGAIN” – and I can’t check out its validity.

Back to Basics – The Real Reason for Housing Benefit

The market’s changed.  For every ad I place the majority of calls will be from working professionals who have chosen an all-inclusive rate so they have enough salary left over to have a life.  I no longer need to fill the rooms with the slightly odd, vaguely desperate or those that fall out of society’s moral code of conduct.

Back in the late 1940s the Social Security System was so named because:

SOCIAL                 def pertaining to human society

SECURITY             def freedom from danger, risk, etc; safety

There are still at least 1 out of 10 callers wanting a room who won’t pass the referencing process, can’t get the deposit together or will struggle to conform to a landlord’s ideal tenant.

My business head tells me to go with this new professional market demand and fill the houses with law abiding, rent paying via standing order tenants who read and abide by the AST and wash their sheets weekly.  My life will be calmer yet poorer through the lack of tenants educating me on the true meaning of survival and refusal to conform to society’s expectations.

Please, bring back direct payments to landlords so our business heads no longer discriminate against the unemployed.

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Easter Break In: An Update

Ok, so those of you who read my last post Easter Break In will know that an HMO room suffered a burglary where only cash was stolen (all other valuables left intact, including four bottles of champagne which proves it wasn’t me as I would have nicked the champagne first).  After discussions with the victim and the other tenants, who are quick to deny culpability, the badge of suspicion was laid on Andrew.  I’ve since found out that he’s not only a self confessed gambling addict, but is also on Pub Watch (this means he’s been banned from every pub in town for punching someone) and is on probation doing community service for holding up a bookies (not sure what with though).

I’ve been mulling over a solution to this problem as:

a)  There’s no evidence it was him

b)  The tenants are known by everyone in town that they repeatedly forget to lock the back door

c)  I actually like the guy, he’s paid his rent bang on time every week and is adamant he’s innocent.

Watching My Move

In the meantime, I’ve got five other tenants watching what I’m going to do about it – one of which is never there and only uses the room to store his stuff following his bankruptcy, another who is at work all day, a Romanian ex-border guard working for a hotel, Tom the alcoholic when he’s got cash – salt of the earth when sober and the victim – a guy who is Andrew’s manager and recommended him for a room in the first place.  They’ve all been quick to lay the blame and “threaten to punch the first f****r” to put a foot wrong but shy away from any confrontation when I try to bring them all together to find a solution considering their suspicions are based on little more than reputation.  And, to be honest, I have no idea who it was either.

The trouble is, as landlady, I have to be seen as impartial, fair, law abiding and on every tenant’s side.  These tenants, either through their own making or circumstances into which they are born, carry their vulnerabilities around with them until being defensive becomes a means of communication and, before I’ve even opened my mouth, assume what I’m going to say or interpret what I am saying as a personal attack on them.

The Solution

I had decided to tell Andrew that I wouldn’t let his contract turn into a periodic at the end of his fixed term in July.  Whilst the Section 21 would be a no fault notice, I felt that everyone was gunning for him, tensions were high and it would be better for all concerned if he found alternative accommodation.  In fact, I have a room coming available that would suit him perfectly then, at least if anything else happened in the house, he couldn’t be blamed for it.

Before I’d even started the car engine the “Big Boss” was on the phone to me pleading, yes, pleading for me to let him stay in a call that lasted 28 minutes.  This was weird because I’d heard that even he thought Andrew had committed the crime and was waiting for him to mess up again and he wanted to know why was I “chucking him out?”.  I let him rant for a bit before explaining that I felt I was playing fair and then threw back to him – What would he do in my position?  Wait for the inevitable showing of fists (note: showing NOT using), arguing and then everyone phoning me at midnight in the mistaken belief that I’m the police and can break up five grown men (two of whom are bound to be pissed)?

I left it with him that moving to another house may calm everyone down and allow Andrew to lead his life without preconceptions from fellow tenants; he suggested that I install CCTV cameras and security grilles.  No to the grilles but last year I had been thinking about CCTV in the communal areas even though I really, really don’t want to see tenants in their pants going to the bathroom.

Whilst I check out CCTV costs, anyone got any other ideas?  Or the number for the United Nations?!

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Am I Really Guilty of Breaking the Law?

Landlord Law Blog posted an article about rent books this week which I read with a mixture of interest and guilt.  Since falling into running HMOs I’ve been vaguely aware that it’s a legal requirement for landlords to provide rent books to tenants who pay on a weekly basis.

About once a year I think “I must provide rent books so I don’t get thrown into jail” but the following questions always nag me:

  1. How often will my tenant remember where their rent book is?
  2. Will they remember to leave it out with their rent each week?  I’ve spent years training them to leave their rent in a conspicuous place and don’t enjoy rifling through their underwear drawers or bedside tables to look for it (with their permission!)
  3. How often will I have to replace their rent books when they’ve lost them thereby losing their record of payments from the beginning of their tenancy?
  4. Who’s going to tell me off for not providing them?

I’m not being glib about the need for a record of payments, just about the method.  Maybe the tenants have total trust in me or maybe it’s ignorance but all they care about is that the cash is handed over to me and I provide the accommodation.  I issue a receipt for each payment received, a date for when the next rent is due and, if they’re short or overpay, it’s all recorded in duplicate so we both know where we stand.  Then, I don’t care if they wipe their noses on the receipt, use it instead of a Rizla or file it for safekeeping because my master book has all the payment records for all tenants dating back to the beginning of my landlord career (in case the Inland Revenue want a fascinating read!).

If a tenant is struggling to keep up to date with their rent, I’ll issue a rent statement showing their payment record which also goes onto their file so I can keep track of bad debt for accounting purposes.  Now, if all this sounds like I enjoy being organised – I don’t and have to force myself to stick a book keeping head on for an hour a week.  One tenant’s rent arrears statement runs into three pages when he got into trouble a couple of years ago.  I’m desperate for him to catch up just to save on ink!

The solution, of course, is to get everyone to pay monthly by standing order (excuse me whilst I pick myself up off the floor!) but then we’d miss doing what we do best – having a weekly gossip and catch up.  P.S.  I shall concede defeat and provide proper rent books in case any readers are planning to report me to………………….?

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A Moral Dilemma – Is My Tenant Still Alive?

Apologies for not posting last week – this being due to half term and not being able to get near the computer as the children felt that Moshi Monsters and Friv games were adding to their educational abilities.  We also took some time out to go to the Peak District and admire the rock formations – THAT’S educational!

Where’s Steve?

Six weeks have now passed since I’ve had any contact with Steve.  You may remember that he’s the tenant in one of my largest rooms priced at £100pw including all bills but, as he’d done well not smoking weed in the house and I thought we’d come to a mutual understanding on how to behave,  I gave him a preferential rate of £90pw.  Why?  Because I still hadn’t learnt from the old addage “Give ’em and inch and they’ll take a mile”.

After the marijuana incident (i.e. the whole street was mellowing under its influence the smell was so strong) and he’d asked to move into the bigger room, we got on well.  Housing Benefit paid his LHA allowance direct to me because Steve had been/still is a gambling addict and he then paid £112 as a top up.  He’s now 2 month’s down on his top up and nobody has heard sight nor sound of him.  His post is still there, his pants are still in the drawer, some toiletries are still on the dresser and his bed looks like, well, any man’s bed who isn’t hoping to impress a girl.  I’ve written to his guarantor and tried to contact his mother with no success.

From a legal point of view, because he’d moved room but within the same property, I’d created a new tenancy which meant I had to serve section 21 notice for the end of his fixed term of 14th December.  I was a bit annoyed as I’d received two legal viewpoints at the time from a landlord association: one told me to just get him to sign a letter acknowledging the move to a new room but it would continue as a periodic tenancy and another member of the team told me to create to new fixed term agreement and re-register the deposit.  Confusing, but all paperwork has been sorted, served and is now strewn across his bed  presumably in case he runs out of toilet roll.

Moral Dilemma

So, I’m in a dilemma.  House is quiet and stable without him, I’m getting two thirds of his rent paid direct to me by the council and I don’t have the expense of refurbishing his room which is likely to cost £200 (new carpet and full paint).  Do I consider the room to be abandoned (but I think there’s slightly too many belongings, albeit they’ve been undisturbed for six weeks); or proceed to get a court order if he hasn’t moved the stuff out by 14th December?  Morally, I probably should be trying harder to find him as we’re a small town and people don’t just disappear but his phone’s ringing so he’s clearly still charging it.  I do worry, with his history, that he could have come to a sticky end but hope a relative would’ve wanted to lay claim to his paltry belongings.  However, I haven’t applied for a court order before so I’d like to be able to say I know how to do it.  What would you do?

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HMO Tenancy Agreements

Yep, a pretty boring title but I want to put a little thoughtette out there.  When I bought my first HMO it was sold with tenants in situ although nobody had actually told them that I was wanting to keep them on.  On sale completion, I collected the keys from the agent, tentatively opened the front door to be confronted by a load of suitcases and four very anxious tenants sitting in the dining room.  It turned out that the vendor’s solicitor had sent them a letter letting them know the property had been sold but no other information.  I’d already tried to contact the vendor prior to completion to understand who was living there and on what basis, but she hid behind the fact she spoke only Chinese and refused to answer my calls.  As my solicitor pointed out “Well, she understood enough English to buy the property in the first place so don’t believe she hasn’t enough vocabulary to sell it”.  Well, it was the heady, greedy days of 2007 and I was as gullible as an excitable dog chasing a ball over a cliff.

Licences

The tenants had been issued a one page licence which looked on the surface OK and covered most aspects so I continued to run with these for a while until I got a call from the local council.  I’d homed another Sally Army customer and, after discovering his girlfriend locked in the room having had a miscarriage then, a week later,  his naked body and room stripped bare after taking an overdose of drugs, I asked him to leave.  Someone from the council, presumably the lovely Ben Reeve Lewis’ evil twin brother said they would take me to court for wrongful eviction (technically sort of correct, but I didn’t actually chuck his stuff out on the street) until I employed a local, even more, naive solicitor and they let me go on the basis that I did actually save the ungrateful man’s life.  The paramedics said he would have been dead within the next couple of hours if I hadn’t found him AND I even went to hospital clutching grapes – he told me he’d had a bad case of food poisoning!  I’ve only ever seen one dead person and this tenant looked pretty similar apart from the fact rigamortis hadn’t set in.

Assured Shorthold Tenancies

Having been educated that my licences weren’t worth the paper they were written on, I joined a Landlords Association which, at the time, was the best move.  (Having said that, I’ve been given different advice by the same helpline on more than one occasion but nobody died so I’m overlooking that) and issued all tenants with a standard AST.  Phew, legal now.  What struck me right from the beginning of issuing these ASTs is that they are, in the most part, unsuitable for HMOs.  The main reason being, if a tenant is anti-social or carrying out criminal/illegal activity it affects the very people he or she shares the house with.  I appreciate that, with police and witness statements, grounds for possession can be made within a couple of weeks and granted if the court agrees with the severity – however this is a lengthy and costly process for someone in an 80 quid a week room.

Anti-Social Behaviour

How, as a landlord, are you expected to protect four decent law abiding tenants who just want to go to the bathroom or make a cuppa whilst one naughty tenant is running amok?  I had a situation where four frightened girls had to barricade themselves in their rooms whilst a nasty drug dealer, who lied that he worked at B&Q, ran an all night drug trading session and allowed his junkie mates to use the bathroom and kitchen.  How on earth could I have protected those girls, who were absolutely terrified, against the threats and abuse they got whenever they left their rooms?  I got to a point where I was going to move in and play Burt Bacharach at 6am every morning.  I tackled the council about this and, predictably, they couldn’t give me an answer.

Challenge

Landlord Law wrote a blog about house share tenancies which will give you some good guidance.  However, I put it to anyone to provide me with a cast iron HMO tenancy agreement that protects the existing incumbents against having to put up with ongoing anti-social behaviour during the two month Section 21 process.  Yes, the police can be called in severe cases but they’ll only take the errant tenant into custody for one night releasing them back to the house to unleash untold vengeance on the informant.

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