In the period that has elapsed since publication of my previous column, the prospect of the UK leaving the EU with a deal has risen considerably. The situation is, of course, still on a knife-edge because there are still so many “known unknowns” (to paraphrase Donald Rumsfeld): will the EU accept Boris Johnson’s proposals, presuming of course that these manage to get through Parliament which, as I write, is far from certain?
Even should a formal agreement emerge neither side will be completely happy, especially not the Brexit party who are comfortable with a “no deal” departure nor those politicians (from all the Westminster parties) who, in their heart of hearts, never have reconciled themselves to the result of the 2016 referendum.
In the event of a deal being signed off the victors will be diplomacy, realism and the art of compromise. As someone who, for almost 40 years, has often been charged with adjudicating between landlords and tenants this strikes a chord. Just as compromise will be the glue that holds together any agreement between the UK and EU, so it is an essential component in the business of residential lettings.
Some landlords, unfortunately, enter the sector unaware that residential property is a “working” investment quite different from liquid assets. They will kit out their new house or flat in the naïve belief interiors retain their pristine condition no matter the length of a tenancy. Tenants are expected to spend their time walking on eggshells; in other words they should take extra care to avoid minor scuffs and spills and should navigate their homes in a manner that does not wear down sofas or carpets. Thus what any fair-minded person would recognise as “reasonable wear and tear” is magnified into “damage” which has to be paid for.
I could give you chapter and verse but the situation was epitomised recently when a client, returning to Scotland from living abroad, complained that the interior of her let property, despite being undamaged, was not in the pristine condition she had left it in 15 years before. Having managed a series of trouble-free tenancies and gathered £280,000 in rental income on her behalf during the period, this response left me – unusually – lost for words.
What is clear is that uncompromising landlords tend also to be unhappy landlords and I sometimes wonder if those who get themselves into a tizzy over really minor issues would perhaps sleep better if they put their money into a different investment vehicle.
They fail to realise that this attitude is counter-productive, both financially and in terms of their own well-being. I have known landlords to lose the goodwill of decent tenants – who pay rent timeously, respect their surroundings and don’t hold regular parties – over minor disagreements which would cost, in relative terms, a pittance to resolve. As a result the tenant moves out and a good income stream is lost; or the tenant remains but changes his or her mood from one of co-operation to surly acceptance, with the relationship breaking down as a result.
Fortunately, these landlords are in a minority. The majority, who believe in dealing with tenant issues in a polite manner and are prepared to compromise to effect a resolution, tend to be happy landlords. Just as someone with a tracker ISA expects to experience occasional dips in share prices while anticipating a good net return over time, so the realistic landlord knows that where there is disagreement – and the other party is seen to be reasonable – then making compromises is worthwhile if it means the continuation of a regular, hassle-free rental income stream.
Sensibly, they are aware that by letting to a succession of people – no matter how responsible – over an extended period, some things will inevitably need to be fixed or replaced and have budgeted accordingly; an attitude that is not only morally right but pays dividends in the long term.
- David Alexander, MD of DJ Alexander