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Landlords! Are you making one of these five fatal mistakes?

A landlord mistakeIf you are a landlord are you doing any of the following?  If so this is bad news!

1. Allowing someone to become a tenant without referencing them properly

Amazingly it seems that many landlords take on tenants without doing any referencing at all! This is really bad news.

A property is a huge investment. When you rent it out you are putting another person in total control of it.

For example many landlords have found that their properties have been turned into cannabis factories, costing them thousands to put back into a proper condition again.

Surely it is worth the effort to take a bit trouble over checking prospective tenants out and getting a credit reference done? It is not expensive and could save you a lot of money.  See my directory for some credit referencing companies.

2. Allowing tenants in without getting them to sign a proper tenancy agreement first.

I think most landlord now realise that a tenancy agreement is important, but the point is still worth mentioning.

In particular that if you let them in BEFORE they sign the tenancy agreement, and they then turn round and say “Sorry mate, I’m not signing that” there is not a lot you can do about it.

Other than evict them, which will take months.

3. Failing to protect the tenancy deposit

Despite the fact that the tenancy deposit regulations came in five years ago, some landlords are STILL failing to protect them, Either through ignorance or pure bloody mindedness.

Landlords should be aware though that new regulations are coming in which will mean that if you don’t protect within 30 days of taking the money, you will have NO DEFENCE to a claim for the penalty payment (which will be between one to three times the value of the deposit).

AND in most cases you will not be able to use section 21 to evict unless you pay the depoist money back to the tenant! So best to protect now and be safe.

4. Allowing your tenants to run up a big rent arrears bill

The best time to get your tenants to deal with rent arrears is right at the beginning. If you let it drift and they end up owing thousands and thousands of pounds, in most cases they are never going to be able to afford to pay this.

Yes, you will be able to evict them using the serious rent arrears ground, but far better not to have the rent arrears bill get so large in the first place. If you speak to them early on there may be ways you can help them, such as changing their rent payment date or allowing them to take in a lodger.

Note that I have a Rent arrears Action Plan service on my Landlord Law site which gives guidance to landlords with tenants in arrears of rent.

5. Serving a defective section 21 notice

The rules for drafting section 21 notices appear straightforward but thousands of landlords have had their case for possession chucked out by the Judge because there was something wrong with their notice.

As the notice period is a minimum of two months, this means it could be another six months before you can get them out. During which time they will be paying rent late, annoying the neighbours by their loud parties, driving your other tenants away in droves because of their unsavory personal habits, or whatever.

If you are a bit vague about the precise rules for drafting section 21 notices, I have a new guide to help you on my School for Landlords site here.

What do you think are the biggest mistakes landlords make?

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The Landlord Law Blog from Tessa Shepperson

Tessa is an English lawyer specialising in residential landlord and tenant law.

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