First Section 21 notice in 20+ years looming?

First Section 21 notice in 20+ years looming?

11:40 AM, 23rd June 2022, About A week ago 6

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Along with my own portfolio, I look after a single property owned by my elderly mother. It is the last one of my late father’s portfolio, the others having been sold some years ago as they became vacant.

This one, the tenant has been in for 25+ years on an AST. Occasional rent increases have occurred, but due to the tenant being little trouble, it is around 50% of the current market rent.

Costs of maintaining it, and the administration, have obviously risen but mother has absorbed a certain amount, but the threat of the Renters Reform White Paper really is the “last straw”.

EPC is currently E, and although some minor improvements could be made, the tenant tends to be resistive to work being carried out. Achieving “C” is a pipe dream, its a 1890’s terrace.
No Gas to worry about.
Electrical inspection, it just about scraped through, and the work that really needs to be done will be very invasive.

Three options;
sell at auction with sitting tenant on low rent.
sell at auction, vacant and un-modernised
do enough for a private buyer and market it through an agent

I’d appreciate people’s opinions on a way forward. Personally, I’d prefer to serve a Section 21 and sell it vacant, but I’m concerned that if they don’t leave and we attempt to evict, whether tenancy agreements from 25 years ago and no doubt a “missing smoke detector receipt from 10 years ago” type technicality is likely to trip us up even though the tenancy agreement predates pretty much everything required when issuing a new tenancy today.

The other issue for me, is that in approaching 30 years of being a landlord, I’ve never had to serve a S21. I’ve been blessed with either good tenants or ones that just cleared off before being evicted.

All thoughts are appreciated and respected.

Smiffy



Comments

CMS

21:19 PM, 23rd June 2022, About A week ago

I think you need to speak to the agents and see what they think. I think you will struggle to sell the property with a sit in tenant that is on a rent that low but any buyer is going to want to increase the rent straight away and (a) you have already said about the current condition of the property; and (b) a buyer coming knows that its not going to be easy getting that tenant out.

That being said, you dont want to get vacant possession and/or spend money refurbishing the property if its either (a) not going to make it more appealing to buyers; or (b) if you're not going to recoup your expenditure on a sale.

Speak to some agents and see what they think. One other final question would be, what is your reasoning behind selling? Is it because you want the lump sum or have just had enough of being a landlord? If it is the latter, maybe you should speak to the tenant about their financial situation. They are obviously happy being there and if you could come to an agreement on a sale price, and you were not worried about having all of the money in a lump sum, you could effectively take a mortgage on the property for the sale price. You will no longer receive the but the tenant is more likely to pay you an increased sum if they know that they house will be theirs one day.

It also means that you don't have all of the concerns that landlords usually do. That being said, the idea is rubbish if you are hoping to sell and get a lump sum!

northern landlord View Profile

15:26 PM, 24th June 2022, About 6 days ago

This is a difficult one. Sooner or later you will run into the buffers if you just carry on. In 2028 you won’t be able to make the C rating on the EPC but might well have to spend around £10,000 making the best efforts you can before you can be exempted. Likewise it seems you only just passed the electrical check, you will need another one in five years and maybe you might have to spend around £6,000 for a full rewire. By then you also will have to have paid for landlord registration, a decent homes inspection (which the house might not pass if things like kitchens and bathrooms are outdated, it has single glazing or you don’t have a modern heating system). You will also have to subscribe to an ombudsman scheme. So whatever happens you/your mother are going to have to lay out serious money (potentially up to £20K) in the next few years on the back of a low rent that might not cover it.
I don’t think your tenant would be very attractive to a buy to let landlord and would be seen as a liability rather than as an asset. If section 21 were still valid at the time, the new landlord who has no relationship with the tenant would just evict them. if you delayed until section 21 is banned the new landlord would be unable to evict them so you would not get a sale. A BTL landlord will also know about EPC changes and will factor that into any offer. So you might not be able to sell at all, or for anything like market price.
Your best bet with a business man’s hat on would be to evict the tenant yourself and sell to an owner occupier after getting the place valued as it is after the tenant has been there 25 years, with an estimate of what it would be worth done up to see if the expense and time are justified. As a landlord with other properties you know all this anyway. However, I expect the human aspect is the one praying on your mind. How stressful will it be for an older long term tenant who seems as if they may be a bit reclusive and has been favoured with a rent well below market value for years to be suddenly made homeless? Could they afford a market rent? You have to decide if your head or your heart should rule. It would certainly keep me awake.

Mick Roberts

15:55 PM, 25th June 2022, About 5 days ago

I'm probably in same boat.

My tenancies are 25 years old. And I know one day, I'm gonna' have to go court to get tenant out. Tenants are all good now, but we know stuff changes in the future. And one day Judge will look at me & say U having a laugh Mick, this tenancy is from the Ark.

It sufficed then, it was legal then. I've always tried to follow the rules, but I find as many one man bands have on here that's got lots of houses, we being overtook by rules & regs. Not only does one rule come out & you've driven round every house getting tenants signatures for 6 months, then another one comes out. And all of a sudden, we becoming illegal law breakers. When all we've tried to do is keep tenant safe in their home of 25 years at a rent 30% below market value.

Yes I know, I shun't be admitting on public wall I'm becoming illegal, but that is the way Govt's & Council's are forcing us. We was doing the right thing by the tenant in new boiler, kitchen etc., but not the new legal law technicality thing by way of Govt/Council. I apologise in advance & shoot me down now. Or maybe joined up sympathy. Feel better now got that off me chest ha ha.

I know exactly where this article poster is coming from.

DSR

12:28 PM, 26th June 2022, About 5 days ago

Reply to the comment left by Mick Roberts at 25/06/2022 - 15:55
I feel your pain and know EXACTLY where you are coming from.

It comes to something when good landlords are constantly chasing their tail to prove they are tick box legal when there are LLs out there abusing the system completely and no one seems to give a stuff despite ENOUGH legislation out there to be prosecuting these immediately.

Gone are the days of being a good LL with the right intentions and a happy tenant that's also happy with a bit of give and take and a good talking relationship.

The relationship between LL and tenant is becoming political and in turn toxic. Tenants are being constantly told LL's are all bad and they are there only to screw you over, so are therefore looking at the law at ever which way you turn to trip you up. Doesn't help with these ambo chasing solicitors and Legal Aid funding all these tenants who have nothing to loose. The PR is great for the lawyers and Shelter. Another stick to beat the PRS with.

If I am ever hauled up, I shall go to town, making sure that I make the judge understand the position of the private LL exactly.

For me its turning sour. I have to think of it as housing a barcode/number now and not really a person. Its simply business. None of the agencies I deal with treat their claimants with any respect, and in turn they come to me seeing me as part of the 'system'. I get tarred with the same brush.

As a result if the tenancy has to be ended, they purposely string it out as they have no where else to go and no one else to step in and help. There is no thought that I have to pay my own mortgage. For them I am part of the system which houses them and now telling them they have to move so emphasis on me to sort this out not them.

Personal responsibility has gone out of the window. They have been assured the state will provide.

Threat of costs/rent arrears etc means nothing. They have nothing anyway . You cant get blood out of a stone.

There has to be a lightening bolt somewhere in all of this. The balance has to be redressed. At the mo there is little light and I see the group of tenants that were hard to house becoming bigger and bigger. Less private LL's are taking ANY benefit tenants these days. The good ones stay the bad ones are being moved on so if I have anyone come to me homeless I have to think there is a negative reason why.

Yes is is tarring everyone benefit tenant with the same brush but that is exactly what the government are doing to private LL's.

Mick Roberts

18:24 PM, 26th June 2022, About 4 days ago

Reply to the comment left by DSR at 26/06/2022 - 12:28
Very very true for new tenants.

Gone are the days of being a good LL with the right intentions and a happy tenant that's also happy with a bit of give and take and a good talking relationship.

I can't look after family or friends with cheap rents any more as we never know when or where the next unexpected Council or Govt outgoing is coming from.

My lightening bolt I try to tell myself is even though I'd like to sell lots, is At least u having no voids & refurbishments Mick cause they can't get anywhere.

M&SFAN View Profile

22:48 PM, 30th June 2022, About 3 hours ago

Have you thought of putting the rent up to cover the costs? I appreciate this is hard to do for the tenant and your relationship with them, they sound like they have been fine all those years. But possibly that tenant could pay more?
Have I misunderstood?

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