A blog post by eviction specialists Landlord Action has exposed bad tenants who can clearly afford to pay the rent but choose to spend their money on other things.
In a post entitled “Using the rent to keep up with the Joneses” Landlord Action founder Paul Shamplina explains how he attended a successful High Court eviction in North London, which will appear on the next series of Nightmare Tenants, Slum Landlords.
The tenants owed £16,000 in rent but were reluctant to leave the property.
“The tenants had failed to pay rent for eight months. They had delivered excuse after excuse as to why they aren’t able to make the payments. Yet they had a house filled with all the latest technology, gadgets and gizmos. They also had a brand new car. They really appeared to be living the high life,” said Shamplina.
“Even after all these years, this case made me angry. Just because they didn't own that home, it did not mean they had a right to expect someone else to fund their lifestyle and enable them to treat themselves with whatever they want. Rent, like a mortgage, should be the single most important payment that a person/couple makes each month.”
The couple who rented property in question were both school teachers, and had children. They had passed their reference checks and on paper appeared to be ideal candidates to rent the £2,000-a-month property.
“Forcing someone to leave a property is never a nice situation, and particularly at this time of year. But how can two fully grown adults with responsible jobs not understand that the situation they find themselves in is not the fault of the landlords, but a consequence of their own actions?” said Shamplina, “It was as if they genuinely didn’t think they would have to leave the property. They simply didn’t think this day would come.”
Shamplina said Landlord Action sees all types of circumstances in the course of the company’s work and he can sympathise with tenants who have fallen on hard times and got behind with the rent.
“These tenants were nothing like that. They were manipulative and irresponsible. The couple used excuses to tug on the heartstrings of this particular landlord and he gave them extra time over and over again. Finally, as a result of the financial strain the landlord has been put under from not receiving rent, he is being forced to sell the property,” he said,
“Rent is a responsibility, and more people should treat it as such, rather than a choice. Yes, lots of people want a nice home filled with lovely things. But you can't just have whatever you want in life without paying for it. Renting a property is no different.”
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Some tenant treat it as choice due to pro tenant law .Further they think even landlord or agency goes through eviction process that takes more than six month time.
Ok you say pro tenant. im my case ive had to move 7 times in say 14 years as every landlords has sold or moved back in, where is the pro tenant laws that protect me or pay all my forced moving costs, the only protection I have is a pathetic 2 months notice, then if ive not found a house in 2 months however long it takes for the courts to take action, so those of us that have belongings and business equipment are forced to take properties we dont want or even like as 2 months is often not long enough to find not just any house the right one etc
Believe it or not, there are lots of tenants like the above with good jobs and refused to pay for rent thinking they can live off landlord as they have more than one properties. Look at families on benefits. They live off the tax payer and states welfare buying expensive sofas , big screen tv, latest gadgets for their young kids and expensive holidays that a lot of landlords cant afford to buy for their kids and they have to do without a lot of luxuries which are not a necessities just to have a rental property to provide for their living or old age pension. i had known landlords whose house was in worse state than the rented property as they are spending a lot on the rented property to follow regulation and cant afford to do up their own houses.
And hence this is why for such a small realistic cost - the words Rent Guarantee Insurance come to mind.
Easy to say not so easy to achieve.
In an ideal world every tenant would have RGI on them
Trouble is very few tenants qualify.
A tenant with RGI is gold dust.
It is just a fact that due to disparate employment circumstances achieving RGI is impossible.
The losses to RGI companies can be huge due to the dysfunctional eviction process.
For an £89 premium it cost the RGi company I used over £10000!!!!!!!!! when I needed to make a claim.
They would have to sell an awful lot of RGI policies at £89 just to pay for my one claim in a year.
Losses caused by tenants amount to £9 billion per year.
No insurance underwriter will be prepared to take such losses.
So those losses will continue to be borne by LL who take on tenants on whom RGI CANNOT be achieved.
This is of course a MASSIVE business risk.
But it is one that most LL have little alternative than to take.
If they didn't there simply wouldn't be the tenants that the LL would want who could qualify for RGI.
Very few LL it seems understand that due to the dysfunctional eviction process they risk enormous losses if RGI isn't available.
This situation will become even worse when S21 is abolished.
Nobody will actually say it but being a LL is actually a very risky business.
Agreed Paul it is a very risky business. So I feel it is important that Landlords are continually reminded, educated, helped, cajoled - whatever you want to call it, into recognising the risk and giving them the tools to reduce the risk as much as possible.
So when I see companies short cutting processes and trying to gain a "business advantage" AT THE RISK TO THE LANDLORD - I will stand up.
Unfortunately a lot of the enlightened Landlords will adopt a prudent business model with appropriate risk factored in. They are the minority though.
The industry really needs a lot more education on all these parts, however, even designation industry bodies unfortunately still take the route of least resistance or allow commercial decisions to promote unhealthy business practise.
So until that stops landlords will be at risk.
Yep everything you contend is totally correct.
It does seem though that as you intimate there is almost a conspiracy of silence in not letting LL know the massive risks they are subject to.
I believe if it was made know to existing and prospective LL it would have them running for the hills!!!
I actually believe that abolishing S21 will concentrate the minds of many LL resulting in them becoming more aware of the risks which will cause them to sell up.
Personally I would like to see compulsory RGI.
I'm not sure whether this would be feasible
But I would use the analogy of vehicle insurance.
Profits are made in this industry so why not for tenants!?
I admit I am clueless as to the potential business proposition as regards RGI for all tenants but I'm sure it would merit further investigation.
I suppose I look at the £9 billion of losses caused by tenants per year mostly rent default.
Could RGI premiums exceed this loss amount to generate a PROFIT!?
If so then compulsory RGI could be something worth Govt imposing.
The premiums would have to be kept reasonable at say no more than £200 plus Insurance tax.
So that would bring in a tidy sum for the Treasury!!
Perhaps make the LL and the tenant share the RGI annual cost.
You'd still get people not taking it and fraudulent claims.
In this new age, the road to all of this is through education and more professional services. I'm not saying the Govt were right or wrong in their actions. But they have acted and now is the time to embrace the change and improve the level of professionalism in the whole industry.
It's a big challenge the wheel will turn slowly, it will turn though and if everyone continues improving everyone will win in the end.
Unfortunately not everyone needs vehicle insurance but everyone needs somewhere to live!
It makes sense from a Govt perspective to ensure the LL continues to suffer losses caused by tenants.
Though of course such losses mean the tax take is substantially reduced with the level of rent defaulting that occurs.
Of course in the past rent default meant no tax to pay but now with S24 that GAAP has been dispensed with.
Talk about rubbing the LL nose in it!
Have a rent defaulting tenant still have to pay tax on mortgage debt interest!!
I don't believe that LL will ever be protected from rent defaulting tenants.
The only real defence will be RGI to a minor degree and thorough DD in all other cases.
This won't always work though.
I believe for mortgaged LL a move away from the riskier type of tenant is the only real defence.
A flight to quality if you will.
Where the poorer type of tenant will go I know not and quite frankly I don't care.
Why should I bother housing them when the Govt refuses to change the dysfunctional eviction process; indeed it intends to make it even more difficult to get rid of wrongun tenants.
You really couldn't make it up!!
Of course previously most dysfunctional tenants would have been housed in the SRS but that facility doesn't exist any longer as is unlikely to in the near or distant future.
It has there been left with the PRS to house the dross of society with no protections at all.
I dont think prs are force to house dss or uc but the govt is currently trying to change that and put the responsibility onto prs as they did with the right to rent .
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