David Alexander: Healthy cynicism can protect exposed landlords

This summer Channel 5 has returned with a new series of “Nightmare Tenants/Slum Landlords” which highlights the dark side of the residential lettings sector.
'Rent refusers' come in all shapes and sizes and deliver all types of excuses, says Alexander. Picture: Contributed'Rent refusers' come in all shapes and sizes and deliver all types of excuses, says Alexander. Picture: Contributed
'Rent refusers' come in all shapes and sizes and deliver all types of excuses, says Alexander. Picture: Contributed

In one example, from London, a landlord found himself around £15,000 out of pocket in apparently-unpaid rent. Only, the problem was not the tenant but the agent who had failed to pass the money to the landlord’s bank account. Fortunately, albeit after much perseverance, the landlord managed to claw back the money owed.

In an abstract sense this drew attention to the fact that – unlike Scotland – letting agencies remain largely unregulated in England and it is still possible for anyone to set him or herself up in business as a “letting agent” without undergoing background checks – something that justifiably perplexes established, bona fide agencies who bring to both landlords and tenants years of experience and who endeavour to remain within the spirit as well as the letter of the law.

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However, while rogue agents are a problem in England, as the Channel 5 series has confirmed, the most common reason for landlords finding themselves seriously out of pocket is through tenants refusing to pay the agreed rent and continuing to live in the property knowing that the owner will, initially, be reluctant to start eviction proceedings because of the cost involved and that even once in motion the whole process will take some time.

Yes, I know. If someone enters a bank and robs the teller of, say, £5,000, but is then caught, the perpetrator will almost certainly end up serving several years in prison. But if a tenant effectively “steals” £5,000 from a landlord by refusing, over several months, to pay the agreed rent, that becomes a civil, rather than a criminal matter. But that’s the law as it stands.

Also, if the robber is caught quickly the bank may be able to recover all or most of the stolen money. Statistically, the landlord will not be so fortunate. As the eviction specialist who regularly appears on the Channel 5 programme gloomily stated: “About 80 per cent of landlords will never make up the lost rent or costs of eviction. If a non-paying tenant has no assets what’s the point in suing them?”

“Rent refusers” come in all shapes and sizes and deliver all types of excuses as to why they are unable to pay for their accommodation (this often does not preclude possession of smartphones and expensive digital television packages). However, most of the cases exposed by Channel 5 have had one similar theme – the letting was carried out by the landlord on a DIY basis.

Invariably this was done either to save money (by bypassing an agent) and then taking an overly optimistic view of human nature. For example, the tenant chosen was a close friend; or “they seemed like a nice couple”; or “she was a single mother with two kids and desperate for somewhere to live” (did the landlord not think to ask why?).

There’s a popular myth that all a letting agency does is “collect the rent”. In fact one of its many roles is assessing the worthiness of a tenant-applicant, seeking personal and banking references, carrying out a thorough check and, if necessary, requiring a face to face interview to establish the veracity of information provided. This is not just seen as a standard duty to landlord-clients but is a measure of the agency’s own professionalism. No responsible agency wishes to gain a reputation for letting to people who subsequently fall into arrears.

Having said that, even the best-run agency cannot guarantee that a rogue tenant will not slip through the net. But it will do everything in its power to keep “bad debt” among tenants under its charge to an absolute minimum.

In a free society landlords are perfectly at liberty to independently pick and choose tenants of their own free will. All I would suggest is that if doing so they exercise a bit of healthy cynicism. Occasionally, the “nicest people” turn out to be the “worst tenants”.

- David Alexander is MD of DJ Alexander