I was chatting this week with my carpenter Steve. He was having a nightmare!
Steve had done most of the work at my new cooking school in Bakewell, so I’d seen him a lot over the past nine months. What he hadn’t realized was that he managed several BTL properties on behalf of his wife. I knew Steve liked his Morris Dancing but not property management, I had no idea he had a homeowners advice website.
So now that we had revealed our secret lives as landlords, he went on to explain how they had just had a second set of tenants walk out without paying and had just recruited him to change the locks. Oh darling! I said.
The classic owner mistake
Steve had made the classic owner mistake.
He had been receiving inconvenience from tenants during the last days of his tenancy, who were behind on rent. When they suddenly dissipated from the property, she took it to mean they had moved/’made a broker’. In his mind, he presented the perfect opportunity to jump in and change the locks should they decide to return. Wrong!
The disappearance does not end the tenancy
Paradoxically, the disappearance of the tenants does not mean that the tenancy has ended.
Welcome to the shady world of abandonment where nothing is what it seems!
Abandonment is the voluntary surrender of a legal right, for example, a right to land or property, including tenure.
The problem for landlords, however, is that under section S5(2) of the Housing Act 1988, a tenancy can only be terminated if the landlord obtains a writ of possession.
I know this sounds crazy when you know the tenant basically ‘made a broker’, probably didn’t pay rent and possibly damaged or took property from the property. Quite rightly, many homeowners in this situation would feel a moral right to repossess their property.
Unfortunately, even if the tenant had packed up and left, the tenancy continued. In fact, it was a crime under the Eviction Protection Act for a landlord to unlawfully deprive or attempt to deprive a “Residential Occupant” of the premises or any part thereof. Any landlord convicted by the courts for this could be sued by the courts for damages for illegal eviction, including claiming financial damages from the landlord.
The danger for the owners
One remedy for tenants who have abandoned their rental property is to force their way back into the property, which includes breaking the new locks. Funny, but this doesn’t happen very often. I would have some respect for tenants who actively asserted their right to stay. However, as in the case of Steve, most tenants are not usually desperate to return to deal with unpaid rent or damage they have left behind.
But still, despite all these self-righteousness stances, the law is the law.
As it currently exists, any landlord with a property in which the tenants have disappeared will still need to obtain possession by issuing a section 21 or section 8 notice.
In most cases, the section 21 notice will be quicker and gives the landlord a guarantee that the judge must award possession at the expiration of the notice period. When issuing their section 21 notice, landlords should make sure they use the correct one. If the lease is still within its fixed term, you will need a section 21(1) b. If the tenancy has become periodic, you must use section 21 4(a).
Both versions of the section 21 notice are free to download within our free property management software.
The dilemma of the owners
The dilemma for many landlords facing this situation is that even if they are convinced that the tenants have really disappeared; they would still have to wait several months unnecessarily while trying to gain legal possession. These are months in which the owner cannot reform the property, he cannot market it.
It could easily be another 6 months without paying rent on top of taking a hit from the original tenant leaving without paying.
Abandonment
There are several indicators that suggest abandonment has occurred
– the tenant stopped paying rent
– the tenant leaves the keys of the property
– the landlord’s attempts to contact the tenant or a relative have been unsuccessful
– the neighbors have no knowledge of the tenant’s circumstances
– the owner can see through the windows of the residential investment property and cannot see a whiff of the tenants’ possessions.
abandon options
The choice for owners is difficult.
Are they at risk of being sued by the runaway tenant or go through the lengthy process of gaining possession of their property?
One way a landlord could help themselves if they decided to change the locks like Steve did would be to provide a sign with details of where the tenant could get a new key should they return.
However, when the landlord comes across a professional scammer, and in particular one where the keys have not been returned, it would be virtually impossible to prove that the tenant had no intention of returning.
Owners should be clear, there is no legal basis for the act of abandonment to nullify an existing tenancy. A landlord would be left trying to prove to a jury if a case arose that you might have broken the law by changing the locks, but at least you took all the necessary steps to mitigate the damage caused to the tenant if he returns.
In other words, ‘a guy and considered a ‘lawbreaker’!
Gumtree free but expensive?
Back to Steve’s current situation. One thing that came out of his situation was that several of the recent tenants had passed through Gumtree. I now know that the website is free for owners to use for two listings per year, but my experience with Gumtree has been very mixed. I found that I could get a lot of inquiries, but the quality was often poor. This is fine if you are prepared to sift through the chaff and carry out and reference intensive credit checks.
A comprehensive testing method that I highly recommend is the requirement that tenants submit their last 6 or 12 months of bank statements. Turns out Steve hadn’t been referring to the tenants either. A resounding NO NO!
Owners live and learn
The reality for many owners is that we are not professionals. We have not been educated, we do not have any title in ‘landlording’ nor have we taken a basic business course in many cases. Sometimes our hearts beat us and we leave our rental properties to prospective tenants because they seem like nice and decent people. Unfortunately, not all of them are.
Therefore, homeowners must learn to perform the appropriate checks in the selection process, such as the ones I mentioned above. Good honest tenants who have nothing to hide will agree.
The others – you do not want!
