10:34 AM, 24th June 2011, About 11 years ago
Tenants at a London apartment have sent their landlord spiralling into difficulty after repeatedly failing to pay their rent.
Naomi Koningen is something of an accidental landlord after failing to sell her house in 18 months, forcing her to let out her 2 bedroom, ground floor Streatham flat. In such a desperate time, she said she was ‘naïve’ in taking on tenants who failed their credit check.
The tenants then paid just over half the agreed rent each month and even that quickly reduced. The tenants knew there was little their landlord could do without racking up costly court fees, but she has gone to Landlord Action for help.
Paul Shamplina, founder of Landlord Action explained more of the situation: “On instruction in January, we issued Section 21 and Section 8 notice to the tenants. The harsh reality is that some tenants, especially in this case, are aware that if they leave a property voluntarily, the council will not re-house them. However, if they are evicted, they may be eligible to be re-housed so the tenant has a vested interest to stay put which, in this case, has left Miss Koningen having to borrow money to avoid repossession.”
Miss Koningen should have contacted her lender straight away and explained the situation, according to David Whittaker of Mortgage for Business. He said they would have put in measures to avoid repossession – “if a landlord finds themselves facing repossession, it is because they have left it too long to act. It is imperative that as soon as the tenant defaults on a payment which could jeopardise the ability to cover the mortgage, the lender is notified immediately. Lenders will act sympathetically and often agree a series of actions to avoid repossession.
“If you do not contact the lender and bury your head in the sand, then the lender must assume you are simply choosing not to pay. Often offering some contributory payment by way of demonstrating commitment to the issue, and proof of the steps you are taking to rectify it, will be sufficient.”
The problem is growing, country-wide according to Paul Shamplina – “Many landlords who bought properties at inflated prices but with minimum deposit at the peak of the market had unrealistic expectations of cashing in on the then booming market. As property prices have plummeted in value, those that have not been able to sell have been forced into the lettings market and whilst the market is buoyant for many, it has left an increasing number of amateur landlords vulnerable to the risks that come with renting a property.
“At Landlord Action, we have seen a sharp increase of cases where we are acting for landlords to evict their tenants, but at the same time, they are having mortgage repossessions made against them. Eviction can be a lengthy process and landlords must act as soon as a tenant fails to pay rent to avoid repossession.”