A woman lost her former home after renting it out to tenants whose references – carried out by an agent – did not reveal their former track record.
Yvonne Finberg endured a six-month battle against a serial offending tenant, who was eventually evicted.
However, the ordeal cost her £7,000, leaving her unable to pay the mortgage.
Paul Shamplina, of Landlord Action, which eventually secured possession of the property, said: “It highlights once again the crucial need to carry out thorough tenant referencing to avoid falling victim of unscrupulous tenants and the consequences if you don’t.”
In August 2010, Mrs Finberg went to live with her mother and used a local letting agent to rent out her two-bedroom apartment in Barnet.
After paying two months’ rent upfront, the tenant failed to make any further payments and went about making ‘decorative’ changes to the property without permission, even though it stated in the agreement that this was not permitted.
Mrs Finberg said: “He painted walls and odd cupboard doors, took down radiators, ripped out a sink detaching a waste pipe and removed much of my furniture, which was then dumped in the garden to rot in the winter weather conditions.”
Having used an agent, Mrs Finberg was confident that the tenant-checking process would be carried out thoroughly, ensuring all identification and previous references were valid. It later emerged in court that the tenant had ‘form’.
Shamplina said that gaining possession was difficult: “Discretionary grounds for possession such as this, where the landlord seeks possession on the grounds of ill-treatment to their property, are more difficult as it is up to the courts to decide.
“Once the tenant was also in arrears, we had to wait two months, but at this point we served a section 8 notice seeking possession of the property. Unsurprisingly, the notices were ignored by the tenant.”
At the first hearing last month, the tenant counter-claimed against Mrs Finberg on the ground of disrepair, claiming that he was saving the rent payments, but not passing them on due to the state of the property.
Shamplina said: “Dealing with counter claims increases legal costs and delays the claim process. In this case, court was adjourned until April, at which point further evidence was presented which demonstrated that previous references were falsified (including employment and tenant references) and the tenant had previously been evicted from a property in the area for similar reasons.
“Unfortunately not only were the references not checked properly by the agent, but the contract did not have a six-month break clause to end the tenancy earlier. We won the case and successfully managed to gain possession of the property, but sadly, for Mrs Finberg the suffering is irrevocable.
“With rent arrears in excess of £7,000, she was unable to pay the mortgage and lost her home, could not afford to move anywhere else and her property has suffered an incredible amount of damage.”
Mrs Finberg said: “This has affected every element of my life, leaving me with clinical depression and being subsequently signed off work.
“I have learnt from my mistakes but I cannot stress enough to other landlords, the importance of carrying out thorough referencing checks, meeting with the person face to face, and taking out insurance to protect yourself, so that if the worst happens, you are covered.”
The agent concerned was not a member of ARLA or NALS but did reimburse Mrs Finberg, who said that, as a novice landlord, she was unaware that letting agents were not regulated.
Comments
Fair enough that references were not processed well...but why she didn't take insurance and why did she rely on the tenants to pay mortgage...it has to be paid regardless your tenants pay or not. Not very clever...
I referenced a tenant through a leading referancing co and all was fine 3 months later he was declared BANKRUPT got back to referancing co who said there was no problem the day we referanced him.
The issue here is the bad tenant. But...
Why didn't the referencing pick up his past? Why did she loose her home? Something isn't all it seems here, there is more behind this story than just arreas.
Why did she have the trouble getting the tenant out? I suspect they went about it the wrong way. Never serve a Sec 8 notice "for default", on a "professional tenant" ... your playing into their delaying tactics of counter claims which are always false and the system that favours them.
Where was her landlords insurance ... er none! Asking for trouble. Never ever let without insurance.
ARLA is there to protect the landlord & tenant against any unprofessional conduct by the agent, not by a tenant who happens to be a "wrong 'un".
It's up to individual landlords to pretect themselves against i.e. insure, against such situations where a tenant has been 'undesirable'.
If the agent had failed in his duty of care in referencing then the landlord may well have a case. If they were a regulated agent then it would be considered on the facts.
ARLA is not there to be a 'catch-all' nanny when things go wrong if an agent had acted correctly.
Whether or not ARLA as an organisation is more recognised these days is irrelevant to this discussion. The point being made is that the landlord wouldn't have been better off with an ARLA member in this situation, so it seems pointless that the story and other posters are making a reference to that fact.
It is interesting that no ARLA members have come up with a factual reply as to how the Landlord would have benefited from using one of them. It seems that whenever there is a story about a tenancy gone wrong, there are always people spouting off about the fact that the agent wasn't ARLA registered, when any good practicing agent knows that a key part to a successful tenancy is having the right procedures carried out by staff with experience and good morales and who are not only focused on trying to get a deal done. Without these attributes, ARLA or not, the tenancy is more likely to have problems.
Whether or not it would have made a difference in this case, ARLA was more recognised before becoming a division of NFoPP. The NFoPP has not done a very good job and has been a unmitigated disaster from the point of ARLA and NAEA public awareness, and in other matters too!
A bang over the head i think is in order for the tenant!
don't misunderstand me - I am not sure that the landlord in this case would have been any better off if they had of used an ARLA agent - (although perhaps an ARLA agent would have been forced to refund, whereas the inference here is that it was a voluntary measure) I was referring to the part that says, (despite ARLA's efforts) the landlord was unaware of the differences between regulated and unregulated agents.
I don't see what difference ARLA or any other body membership would have made but we don't know all the facts.
If the agent did the referencing themselves then they are fools. I did referencing for almost 25 years in my previous life and it takes real skill to spot a cleverly worded refernce that passes on a duff 'un to you, borrower or tenant.
If a professional referencing company then they can only go on what is on the form they are presented with. They rely on the agent to take the ID as they are face to face with the tenant, and to check that the utrility etc bill is genuine and not an obvious forgery. Remember negligent only if missing the blindingly obvious in simple terms.
The referencing company - let's say HomeLet - can only go on the data they are given. They may do odds and ends of back room stuff that we don't see or know about and much X-referencing of data, but at the end of the day the employer's reference and lenderor last Landlord is what they are given by the applicant.
Trust me from bitter experience I know that a well organised fraudster using fals references (as opposed to false ID and ID theft) is very hard to spot BEFORE the event.
We can all be wise after it, of course.
Would the landlord have been protected in any way had the same tenant come via an ARLA agent with the same reference subterfuge ruses?
Out of interest, how would the landlord have befitted from using an ARLA agent?
It would be interesting to know whether the agent used a third party referencing company or was doing the referencing themselves.
Presumably if using a reputable referencing company they would have some insurance cover - although I suspect there are caveats and exclusions like most/all insurance policies.
I agree that a side story is that the landlord was not aware of the potential benefits that using an ARLA agent might bring.
This is another argument for LRS and Tenant ID. The previous landlord could have "grassed up" the tenants, BUT as stated above, there might be false names in play here.
It's a shame that the landlady had neither insurance nor the awareness that she would be better off with an agent with ARLA etc. Perhaps price was a factor when she chose the agent.
I think personally I would have claimed the property back wishing to occupy myself, but things are where they are.
I also feel that perhaps a good representation to the lender would possibly have put the possession case on hold long enough for the recompense to pay the arrears.... if indeed the recompense did pay sufficient for the arrears to be repaid. I suspect that there may be more on the possession case which is not covered in this article. It looks as if the mortgage may have started life as a resi mortgage. Wonder if there was permission to let?
All in all - duff tenant - no ARLA - duff agent - poor possession fight - no insurance - nobody to help out to prevent possession - she has been extremely unfortunate.
If the agent didn't check the references properly i.e. the previous Landlord reference came back saying "don't touch him with a barge pole" or the employer's refernce said "who never heard of him" then agent clearly liable and open to a negligence claim that could have gone way beyond the £7000 arrears they compensated or whatever. My guess is that is why they coughed up.
But if you have a well organised rogue tenant who has friends and family set up to give them favourable references, and has photo driver's licence and Passport ID can someone tell me please how to weed these out before the event as professional referencing won't help.
And please none of the "I can spot a bad 'un" and "the hairs on the back of my neck will tell me" nonsense. I lent money on mortgage loans for 25 years and I still couldn't tell who would turn out bad across the desk from me.