Part 2: Tenants Behaving Badly

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Tenants behaving badly

The worst examples of tenants breaching their obligations (and behaving badly) are as follows:

1. Rent Arrears

2. Illegal Subletting

3. Anti-social behaviour & Damage

*Disclaimer: independent legal advice is encouraged if pursuing any of these claims as a landlord.

Although, less documented than landlords’ failings, there are plenty of examples of tenants behaving badly. It is also important to deconstruct the notion that all private landlords are evil, scary property developers. Landlords come in all shapes and sizes. They can be large organisations with multiple properties, but they can also be an individuals, couples or pensioners who rely on the rent of the only property they own as their only form of income. In many latter cases,their financial situation has worsened since the pandemic with Research by the National Residential Landlords Association, a trade body, finding that 22% of private landlords in England had lost rental income because of Covid-19.

This article will examine the key issues raised by ‘rogue tenants’ and the proposed solutions.

Rent arrears

Issue

There is always a risk that tenants will refuse to pay rent and if this is ongoing they ‘accrue arrears’. This can cause landlords significant negative cashflow such as in the case of Mrs Smith who lost £33,500 in income when her tenant changed the locks and refused to pay rent. She also incurred £3,000 in legal fees and will have to pay £20,000 to restore the property. As a pensioner, she has lost her main source of income. Furthermore, she cannot remortgage or sell her property as she still has illegal tenants living there.

The most damaging aspect of rent arrears is that even if the landlord goes through legal recourse, if the tenant has no assets, they are unlikely to ever pay back the lost rent.  

Solution

At the time of writing coronavirus restrictions apply,* which means all s21 notices are banned and tenants cannot be evicted (please see this previous post, for more discussion on this). This ban on eviction even includes circumstances where there is substantial rent arrears, as confirmed in the recent case of The Corporation of the Trinity House of Deptford Strond v Prescott [2021] EWHC 283 (QB) where it was deemed £70,000 rent arrears accrued over 21 months was not applicable to the ‘Rent Arrears Exception’ under a s21 notice. Instead, this order should have been made under a s8 notice.

Therein lies the solution. If you are a landlord experiencing rent arrears from your tenant equivalent to 6 months or more, you should serve a section 8 order and state rent arrears as your grounds, in order to evict the tenant. If it can be proven that eviction can be done safely in compliance with government rules during Covid, it will be allowed under this order.

Illegal subletting

Issue

A common offence by tenants is to illegally sublet their property. In fact, Landlord Action reports that over the course of the past year alone, illegal sub-letting by rental tenants has increased more than 300%. Often, the tenancy agreement will expressly prohibit renting out the room to any other person, which includes short-term lets such as Airbnb. This can include subletting a room or the entire property. Although seemingly harmless, when tenants sublet a property they relinquish control of the property to a third party, often strangers, increasing the risk of anti-social behaviour making neighbours unhappy, issues regarding HMO licensing (see previous landlord post for more on this) and, importantly, possible invalidation of insurance and mortgage terms. Finally, there is an added level of risk of damage to property.

In some extreme circumstances, landlords can sue their tenants for arrears and any unlawful money earned during the illegal subletting. In March 2021, the tenancy enforcement team at social landlord Hyde secured an £81,000 money judgment against a former tenant for unlawful subletting, since at least March 2014.

Solution

If a tenant has been illegally subletting their property, a landlord has legal grounds to start possession proceedings to evict. These proceedings are currently subject to serving tenants with some form of written notice seeking possession of their homes. When the notice expires, the landlord can then apply to the county court for a possession order*

Anti-Social Behaviour & Damage

Issue

Anti-social behaviour (ASB) is a term which covers “behaviour by a person which causes, or is likely to cause, harassment, alarm or distress to persons not of the same household as the person.”

Types of ASB within a tenancy can include:

  • dog fouling, uncontrolled and noisy pets, inconsiderate or dangerous parking and abandoned cars
  • noise nuisance at high levels or unreasonable hours
  • environmental health issues such as rubbish dumping
  • vandalism and graffiti
  • drug misuse, alcohol-related nuisance and prostitution
  • hate incidents and harassment of neighbours, including verbal and physical abuse and threats

A study by AXA suggests that around 15% of landlords have received complaints from neighbours for excessive noise (equivalent to 1,245,000 tenants nationwide). At the most serious end of the scale, eight per cent of tenants – equivalent to two thirds of a million tenants nationwide – admit to actually committing a crime on the landlord’s premises, and a similar figure (10 per cent) say they’ve had the police called to the property.

Anti-social behaviour is one of the most serious infractions tenants can commit, which is why it is not subject to the ‘Eviction Ban.’* Depending on the seriousness of the behaviour it can be prosecuted criminally.

Solution

Landlords can take some practical steps to try to prevent anti-social behaviour or damage to their property:

  • talking to the tenant as soon as there seems to be a genuine issue with their behaviour. In this way, landlords should be emphasising that it is not acceptable to behave in such a way and warn them that they are in breach of their tenancy terms.
  • involve other agencies such as the police or environmental health
  • go to court to get the person behaving in an anti-social way evicted, if they are a tenant or leaseholder
  • apply to court for an injunction.

 At the outset, landlords do have mechanisms of checking tenants’ prospects before renting out their property also, including:

  1. carry out a credit check
  2. asking for employer references or
  3. asking for references from previous landlords

Reputable letting agents will, for a fee, also provide these checks before recommending any potential tenant to a landlord.

It is always advised to take out comprehensive insurance on the property, in case of substantial damage by tenants.

Conclusion

When commenting on the further extension to the Eviction Ban, Robert Jenrick, the Housing Secretary, said: “It’s right that we strike a balance between protecting vulnerable renters and ensuring that landlords whose tenants have behaved in illegal or anti-social ways have access to justice”.

However, with the most effective route for removal for landlords being currently thwarted by the ‘eviction ban’* it could be argued that currently the balance has been tipped more in the tenant’s favour.  This, coupled with the growing breaches of tenancies through subletting and rent arrears, means some landlord groups are calling for the introduction of a rogue tenant database. Such a database would run in parallel to the ‘Rogue Landlord Register’ in order to show any tenants who had been convicted previously for rent arrears or previous tenancy issues. This, it is argued would bring a wealth of benefits for landlords, good tenants and agents alike; providing a means of protecting all parties from common problems such as subletting, rent arrears or refusal to vacate a property.

But what do you think?

*The Government has once again extended the eviction ban, this time to 31st May 2021.

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