Tenants taking advantage of my kindness!

Thunderbird_2

I used to live in a 3 bedroom house that I started to let 2 years ago. The tenants were a couple from my previous worklplace. we signed one year contract then and once more again at the renewal date for another year which is ending in March.

I am a first time landlord, not my choice, but because I was in a negative equity (and still) I couldn't sell it. The rent is short of £100 to cover the interest on the mortgage, which I thought ok in the hope I can sell the house once the martket recover.

Anyway, last March, after signing the contract for another year, The tenants called me asking for the rent to be reduced by £25! This was very difficult for two things, first , the house is competitivel priced that they agreed to rent the first time without viewing it, and the second reason was that £25 will come out of my pocket as the rent doesn't cover the interest. They said that one of them lost thier job. I siad ok, in that case, and because you are my friends, I will reduce the rent by £50 for the next 3 months untill they find another work. I found out they have started working after a month, but they kept paying the reduced rent for 3 months!

Fast forward to November, They texted me saying they want to move out! I asked why and the contract was till March? They said that they want to move to one bedroom accomodation they have found as part of their plan to get to the top of housing list of the council( or whatever that is called) so they will be rehomed into a 3 bedroom accomodation by the council because they have 2 children! I said I am sorry, the contract is till March.
They said what if they move out? Will they lose the deposit? I didn't reply for that text for 2 days because I was extremely busy at work that weekend doing 13 hrs for 3 days. So they texted again on Sunday, saying they will stay till March, but they want the rent to be reduced by £50!

I thought, ok, they are my friends, and to end this landlord-tenants relationship nicely was more important than £50. So I siad ok,

The straw that broke the camel back was yesterday when they texted me saying if it is ok that I take the last month rent from the depsit as this will give them the opportuinity to pay the first months rent and the deposit for the new one bed flat they found!!!!! I was fuming at this point!! And I thought enough was enough because I felt they are taking the p**s!!!

I texted them back saying I can not help them this time, and explained what the deposit was for and that I expect the las month's rent to be paid on time and if they don't, I might consider the small claims court to recover the full rent and the legal fees!

Theyu texted back straight away sauing that they couldn't believe whjat they have read in my text and that they are sorry for looking after the house and how was I their friend and threaten a legal action against them. They said they will never recommend me to anyone(????!) and they want to see the deposit when the hand the keys back.

I replied back saying that I have done all the previous things because they are my friends and when I don't oblige one request of theirs, I become suddenly not their friend?! I told them that I am sorry to know that they see friendship as taking advantage of the other! All I wanted is for them to respect the contract that they try to break at every possible opportuinity!

Rant over! I think I was too nice! Nevermind! How should I take this forward?!

Many thanks

BitterAndTwisted

If they're being completely unreasonable I would consider holding them to their tenancy agreement if you haven't confirmed they can leave early in writing. If you haven't agreed in writing to the rent-reduction you could also consider holding them to the full rent per the agreement.

Please do not forget that disgruntled tenants can willfully do damage to your property which the deposit might not cover and you might have to go to the small claims court to recover your costs. This might not be worth your time and trouble so you could bear in mind that it might be worthwhile just getting shot of these "friends" and renting to your next tenants on a purely professional basis at a realistic and fair market-rent.

G_M

Stop texting. Communicate formally in writiing.

Having agreed to rent reductions, you cannot go back on these.

What is the current market rate for your type of property in the area? If your rent has now dropped well below market rate you might do best to get shot of them sooner and get new tenants (but this has to be mutual agreement as there is a fixed term contract).

If there is not much difference in rental prices, hold them to the fixed term. Remember void months and tenant-find costs money.

Stick to your guns re the deposit. Of course they may simply not pay the last months rent. Often happens. Not much you can do except hope you don't need the deposit for damages!

Learn the lesson - mixing business and friendship is a mistake.
Good luck.

Jowo_2

Despite considering yourself a novice and accidental landlord, you must act in a professional and businesslike way. It is not the tenants problem if you are a reluctant landlord whose rental income doesn't cover the mortgage payment.

The problem with letting to friends and family is that if there are tenancy related issues, the social relationship also suffers. By giving them concessions before, you have given them the expectation that you are willing to compromise and you can only be exploited if you let yourself.

If the property is in England/Wales, did you lodge the deposit in a tenancy deposit scheme? If there are gas appliances in the property, did you arrange a gas safety certificate on an annual basis?

Thunderbird_2

Thank you both for taking the time to read and reply.
The current market rate for my type of property in the area is £650-£700. They are paying £100 less the lower going rate. The house is 300 miles round trip away from where I currently live! So I think I will try to keep them till the end of the AST.

I think lesson learnt the hard way! It's not my trade, so fair enough!

Anybody got experience of agencies managing their properties?

Many thanks

BitterAndTwisted

Agencies can bit a bit of a pig-in-a-poke as you don't need any professional qualifications or to belong to any professional bodies to set up in business as one. Visit some in the area, find out what their charges are and ask to see references from their current landlords so you can find out whether they are happy with the service/s provided.

Jowo_2

Deposit in Tenancy deposit scheme? Failure to do this can result in your paying the tenants x3 the sum of the deposit as a penalty.

Gas safety certificate? Failure to supply this can result in prosecution and a fine of up to 20k.

Did you have a comprehensive inventory/schedule of condition drawn up and signed by the tenants? Without this, if your tenants challenge any deductions you make in court, you will invariably lose the case since you are unable to prove the condition of the outset of their tenancy. No inventory=no deductions.

You can leap out of the frying pan and into the fire by selecting an agent that has a similar level of skill and knowledge as yourself in letting property. Anyone can become a letting agent - it requires no skills, qualifications or experience. Choose an agency that belongs to a professional body which at least means that they protect their clients money and have a code of ethics and complaints procedure, etc.

http://www.landlordzone.co.uk/agents.htm

franklee

Thunderbird wrote: »

The current market rate for my type of property in the area is £650-£700. They are paying £100 less the lower going rate. The house is 300 miles round trip away from where I currently live!

What exactly do you mean by going rate and how are you working that out? Do not confuse asking rents, i.e. the rent advertised on rightmove etc., with the rent achieved. Round here you can easily expect to knock 50-75 maybe more quid off the asking rent in your price range.

If you pay an agent to fully manage they charge circa 12% round here. So on rent of 650 per month about 80 goes to the agent.

I'd expect rents with no agent to be lower anyway.

If you are letting again to strangers do get consent to let from your lender (see the sticky thread).

jdturk

yes you definately need a gas safety certificate as well as having their money in a deposit scheme!!!

poppysarah

Scupper their plans by writing to the council that they're going to deliberate be cruel to their kids (overcrowding) just to be rehoused.
(and RSPCC)

Jowo_2

Personally, I wouldn't worry about the tenants leaving in order to manipulate their situation to become a priority for social housing.

Firstly, it's nothing to do with the landlord who should only concern himself with his property matters.

Secondly, the tenants risk being advised by the council to find a private landlord...

Thirdly, the next landlord may well seek a reference from the current OP...