Here are five things you can do to protect yourself.

1. Register a restriction at the Land Registry

This is a special service offered by the Land Registry designed to prevent forgery. It does this by requiring the solicitor or conveyancer acting in a transaction, to certify they are satisfied that the person selling or mortgaging the property is the true owner.

As of 1 February 2012 this service (which normally costs £50) is free to property owners who do not live at the property. You can read more about this at the Land Registry website.

2. Provide a different address to the Land Registry as the address for service

If your tenant is trying to sell or charge your property, you may not find out about it if the only address the Land Registry have for you is the property address itself.

You can have up to three addresses registered so make sure you have at least one other address registered.

3. Carry out detailed credit and reference checks on potential tenants

Although your ability to assess potential tenants may be exceptional, there is always a first time for getting caught out. Remember that con men succeed because they appear plausible and respectable. That is their job.

Proper referencing will not pick up everything but if it is known that you do this you may not be targeted.

Conversely if the fraudsters become aware that you never do proper referencing you may find that they are your tenants.

4. Never pay out against a cheque before it is cleared

This is a scam which apparently is used more against agents than landlords. A large cheque is sent, ostensibly for rent in advance, and the agency is then put under pressure to pay out against it before it has cleared.

Needless to say it doesn’t clear, and the agency is then left out of pocket. Warning signs are:

• Cheques for amounts larger than are actually needed
• No, or few, contact details provided
• Cheques sent in envelopes with no postmark, and no proper covering letter
• ‘Urgent’ demands for payments to be made before the cheque could have cleared
• Cheques apparently from large organisations where no invoices or purchase orders have been issued

5. Don’t accept large cash payments up front, do carry out regular inspections

As you are no doubt aware, it is not unknown for criminals to rent properties and then convert them to cannabis factories.

I wrote about this a couple of years ago  and you will find a helpful police guide here.

For detailed information I suggest you read the article and the police pdf. However one sign to watch out for is payment of a large amount of the rent in advance, in cash.

It is also suspicious if tenants are very anxious (after making the big cash payment) to be left alone. Understandably if they are going to drill holes in your walls for electric cabling and install high-powered lighting using illegal power supplies (which is what they do).

So insist on payments (at least where they are substantial payments)  being done via  a bank, and make it clear that you will be carrying out regular inspections.

Burglar picture by Bixentro

Here are a few things they may be keeping quiet about

1. They do not have any relevant qualifications.

The letting agent industry is unregulated. There is nothing to stop any Tom, Dick or Harry setting up shop with little experience. Many do.

This is why you should ALWAYS look for an agent which is regulated by ARLA, RICS, NALS or at the very least the Property Ombudsman.

2. They are spending your money

Letting agents hold thousands and thousands of pounds of other people’s money. As there is no regulation for the industry, they can keep this where they like. Sometimes it is just put in the firms general bank account along with their own money (or more likely, overdraft) and spent on their own expenses.

This is why (again) you need to use an agent regulated by ARLA or RICS or one which has signed up to Safe Agent.

3. They have not referenced your tenant properly

Finding a good tenant is one of the main reasons why people go to an agent. However, I have had cases where I have been instructed to evict a tenant for rent arrears and we (ie the landlord and I) find out that the initial referencing was unsatisfactory. Many landlords have also complained about this to me.

The problem is exacerbated by the fact that many agents refuse to provide details of any of the referencing material to the landlord, claiming that they are not allowed to under the Data Protection Act. I wrote about this here.

4. They are getting kickbacks from repairmen used for your property repairs

Not all agents do this of course, but it is not unknown for agents to have cosy relationships with tradesman, with the hapless landlord being charged over the odds.

5. They are encouraging your tenants to leave at the end of the term so they can charge you for finding a new one

I wrote about this here. Again reputable agents wouldn’t dream of doing this, but apparently it does happen.

All of this is totally against the principles of agency law. Under agency law the agent has a ‘duty of good faith’ to deal with his principal (in this case the landlord) fairly and not put his own interests first.

Good agents will do this as a matter of course. Others however, won’t. Which category does YOUR agent come into?

(NB  Do you really need to use an agent?  >>  Click here to find out)

• The increased amount of legal information and help available to tenants,
• amateur landlords issuing defective claims, and (the article claims)
• increased sympathy among Judges for the plight of many tenants in financial difficulties.

But Judges cannot allow a defence where it is clearly inappropriate.  So if you are a landlord thinking of evicting a tenant for rent arrears, you need to be careful before you start your claim.

Here are fives tips to help you

1. Try to avoid bringing a possession claim in the first place

Prevention is always better than cure. The key to this is keeping a close watch on rent payments. It is always easier to get tenants to clear rent arrears if you deal with the situation before large rent arrears have accrued.

Then you will be saved the cost and inconvenience of court action, and the inevitable loss of rent and void period after the tenant has been evicted.

So always contact tenants promptly within a day or so of failing to pay rent and try to resolve the situation with them then. Don’t wait until the arrears are so high that the tenants will never be able to repay them.  (Our rent arrears action plan can help here).

2. Use the accelerated procedure and section 21

There is nothing to say that you have to use the rent arrears ground (ground 8) for possession if you want to evict because of rent arrears. If you can, it is far better to use the special accelerated procedure used for section 21 claims.

However you can only use this if:

• The tenancy is an AST (although most are)
• The fixed term has ended, and
• You have served a properly drafted section 21 notice, and
• The notice period has expired

Perhaps the most important point here is that the fixed term must have ended. This is one reason why it is a bad idea for landlords to give a long fixed term. As was illustrated by the blog clinic case here. If you want to retain the right to evict promptly, then I suggest a short six month fixed term and then allowing the tenancy to roll on as a periodic.

Assuming the fixed term has ended or will end shortly, then, if you have not already issued your section 21 notice, it will often be better to do this and to wait until the notice period has expired and use the section 21 ground than issue immediatly using the rent arrears ground.

There is no defence to a properly drafted claim for possession under section 21.

3. Serve a section 21 notice as well, even if you are going to evict under ground 8

Then if your tenants are able to avoid being evicted under ground 8, for example by bringing the rent arrears to under two months worth, you will still, after a short wait (assuming your fixed term does not have too long to run), be able to evict them under section 21 (should you still wish to do so).

4. Resolve any outstanding disputes with the tenants before issuing proceedings

For example if there is outstanding repair work – get it done. And perhaps agree to remit all or part of the rent arrears by way of compensation to the tenant. Make sure you have documentary proof of this,

Your repairing obligations will apply whether or not the tenant has paid rent, so make sure that a defence of this nature is not an option.

It is also best to avoid doing anything (such as going round and shouting at the tenants) which can be construed as harassment.

5. Before issuing proceedings ensure that the rent claim is worth more than any potential defence

For example say you are bringing a claim for possession based on arrears of rent of £3,000 where the monthly rent is £1,000.

If your tenant is unhappy about your failure to carry out repair works to (say) defective window frames, he may put in a defence claiming compensation for this. However so long as the maximum compensation he is likely to get is under £1,000 you should still be entitled to your possession claim as this will still leave two months rent or more due at the date of the court hearing.

Even better if you are able to prove (quickly, as the Judge will be pushed for time) that the only reason the repair work was not done was the tenants failure to allow you access.

The higher the rent arrears claim, the less likely the Judge is to deny you an order for possession based on a trivial disrepair defence and counterclaim. The usual order in this situation is an order for possession with the disrepair claim adjourned to a later hearing.

In conclusion

As you can see it is important to think carefully about the possibility of a defence before issuing your claim, and so far as possible deal with it in advance. ‘Gung ho’ eviction claims are never a good idea. Particularly as, if you lose your possession claim, the Judge is likely to order that you pay your tenants legal costs.

Landlords wanting to act in person in rent arrears evictions should check out the Landlord Law do it yourself eviction kits.  See also here regarding our eviction service.

Landlords can demand direct payment if the tenant falls into arrears of over 8 weeks. However landlords will generally prefer rent to be paid direct to them from the start so that the arrears never happen. Here are five ways that this can be done.

1. Credit Unions

Many credit unions provide a service where benefit payments are made to a special account and then passed on to the landlord. There are quite a few credit unions that will do this (I have a page with a list of all credit unions that I am aware of).

However credit unions can normally only take on local customers, and not all of them are able to deal with benefit payments, so you may not have one in your area able to offer this service.

2. Tasker Payment Services

There is also a new service, Tasker Payment Services, set up by Leanne Tasker. This is very similar to the credit union service. The Tasker service however is open to all tenants wherever they are located.

Fully registered with the FSA, this is a good choice for tenants who do not have a bank account, or who have a big overdraft. You can read more and find the forms online at the Tasker Payment Services website.

3. Using guarantors

This is the approach developed by Steve Perrons which he described in our podcast in March.

Essentially it involves signing up a relative of the tenant as a guarantor, and then arranging for the benefit payments to go to the guarantor rather than the tenant. The guarantor is then responsible for paying the benefit over to the landlord and ensuring that any shortfall is made up.

Steve has used this method for years and says it works very well. Find out more by listening to the podcast here.

4. Direct payment for vulnerable tenants

If the tenant is a person who finds it difficult to manage their financial affairs or who is unlikely to pay for some reason, an application can be made to the Local Authority for direct payment, to protect the tenant.

This may be appropriate if, for example the tenant has learning difficulties, or is illiterate or cannot speak English. An application needs to be made to the local authority supported by evidence which they will then assess. You can read more about this process in Chapters 5 and 6 of the LHA Guidance Manual here.

5. Direct payment for ‘affordable rents’

Finally, there is the new rule, which came into force in April 2011, which allows local authorities to pay direct to landlords to ‘safeguard affordable rents’. This was brought into force to ‘help exert a downward pressure on rents’ and will be available if a landlord is willing to drop his rent to make it ‘affordable’ to the tenant.

You can read about it in Chapter 7 of the LHA Guidance Manual.

As one is constantly reading about the massive rise in rents recently, this would suggest that landlords are more likely to want to get HB tenants out so they can rent to someone willing to pay more, rather than reduce their rents so HB can be paid direct. It would be interesting to know whether this new power has actually been used yet.

A caveat

Finally, it might be worth mentioning that there are advantages in not having rent paid direct to the landlord. If rent is paid direct the landlord is vulnerable to ‘clawback’ if it is later found that the payments should not have been made to the tenant.

This used to be a big problem when direct payment of benefit to landlords was the norm. The problem does not occur where payments are made via a credit union (or the new Tasker service) or via the guarantor approach pioneerd by Steve Perrons.

This post, which was prompted by a question I got asked along the lines of the first point below, looks at this and tries to demolish a few myths.

Here are five important points:

1. Vendors eviction rights

The fact that you want to sell your rented property does not entitle you, per se, to evict the tenants. There is no special ‘I want to sell the house so you will have to go’ ground for possession in the legislation.

You either sell with the tenants in situ or wait until you can evict them normally (ie using section 21).

2. Vendor / landlords rights to show round purchasers

Neither does that fact that you want to sell the house or flat mean that you have the right to take prospective purchasers round whenever you like. You can only do this

(a) if it is authorised by your tenancy agreement and
(b) upon giving the tenants not less than 24 hours notice in writing.

If your tenancy agreement does not mention viewings by prospective purchasers, then you are not entitled to take anyone round as of right, and you will be at the mercy of your tenants good will.

Even if your tenancy agreement does mention it, the tenants will be entitled to refuse to allow access save at times convenient to them, and if there are a lot of viewings this may constitute a breach of their covenant of quiet enjoyment.

After all, would you like a stream of strangers walking around YOUR home and poking about in your cupboards?

3. Purchasers rights as landlord

When the property is sold, the purchaser will become the landlord of the tenants, in the same way that the vendor was. The text books describe this as saying that he ‘stands in the shoes’ of the vendor.

He does not have any extra rights and some grounds for eviction will no longer be available.

4. Changing the tenancy agreements

So far as the tenancy agreements are concerned, these will still be valid even thought the landlords name is out of date.

It is a good idea, from the landlords point of view, to get new tenancy agreements signed up as soon as you can. However if the tenant has security of tenure he will often refuse to sign anything. There is nothing the landlord can do about this.

What the landlord should do though, is write a formal letter to the tenants telling them of the change of landlord and giving details for the payment of rent.

5. Purchasers eviction rights

Finally, if the vendor does not have any special rights to evict tenants because of the sale, neither does the purchaser.

In fact it is more difficult for the purchaser. Some grounds for possession will be lost to him (eg ground 6 is not available to a landlord by purchase), and he may find it difficult, if challenged, to prove the date a tenancy started or service of notices.

It is very important therefore, if the purchaser is looking to get vacant possession after purchase, that he gets proper evidence of these matters, verified by statutory declarations, from the vendor before completion.

Purchasers should also be wary of cheaply priced investment properties as these may contain nightmare tenants who cannot be evicted as they have a protected tenancy.