Legal expert gives crucial advice to landlords on rent arrears and eviction challenges

Legal expert gives crucial advice to landlords on rent arrears and eviction challenges

9:45 AM, 30th May 2024, About a month ago 13

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In a challenging and uncertain time for landlords, one legal expert gives advice no landlord will want to miss.

Solicitor and managing director of Landlord Law, Tessa Shepperson shares her insights on how to handle rent arrears, navigating the eviction process and the uncertainty surrounding the Renters (Reform) Bill.

Ms Shepperson also explains the importance of property inspections, particularly when it comes to landlord insurance.

How Landlord Law started

Ms Shepperson didn’t start in law originally; she initially wanted to be a geography teacher!

She explains: “I originally did a geography degree and planned to be a geography teacher. I did the teacher training course but then realised that I wasn’t very good at teaching 13-year-olds who didn’t want to learn geography!

“So, in order to have a marketable skill, I went to secretarial college, where I discovered my passion for law. This led me to pursue a law degree in London, which I completed over five years, after which I took the Law Society solicitors finals exams passing with merit.

“I worked as an assistant solicitor for Cozens-Hardy before deciding to set up my own business as a sole practitioner.  Which I really enjoyed.”

Ms Shepperson adds the introduction of the internet helped her create Landlord Law.

She tells Property118: “The internet came along in the 1990s and I was fascinated by it. After setting up my first website, I gradually became aware that many landlords didn’t know what their legal rights or obligations were, but didn’t want to put on a suit and go and see a solicitor.

“So I decided to develop a website where people could go to find out, and that’s how Landlord Law was born.”

Landlord Law has continued to grow, offering a range of resources and support to landlords to help them manage their properties, including tenancy agreements and a guide to rent arrears.

More likely to resolve rent arrears if you jump on it immediately

Ms Shepperson tackles a common landlord challenge: rent arrears. She gives guidance to landlords on how to deal with rent arrears and emphasises landlords need to deal with rent arrears immediately.

She said: “The most important thing is to check if tenants are paying because you are more likely to resolve it if you jump on it immediately.

“Use a service to notify you of missed payments or check your bank account on rent day. If the tenant hasn’t paid, contact them about it immediately.

“It won’t always be that the tenants don’t want to pay, and it’s sometimes a genuine error.  In which case your tenants will be grateful if you let them know as they won’t want their rent arrears to mount up.

“Your first letter to the tenant should be along the lines of ‘we don’t know if you realise this but your rent hasn’t come through, could you please pay’.

“Then you can send more letters with increasing severity and then serve a notice on the tenant after two months if they fail to comply.

“If the arrears continue to go up, you may have no alternative but to consider eviction.”

Ms Shepperson adds Landlord Law has helpful resources to help landlords deal with rent arrears.

She said: “If you deal with it immediately, the fact that tenants know you will be monitoring their rent payments and that you will get in touch if they don’t pay is going to incentivise them to ensure this does not happen.

“If you just ignore it and let things drift, then tenants will think you don’t care and will carry on not paying.

“At Landlord Law, we have our Rent Arrears Action Plan which has detailed guidance on how to deal with rent arrears.

“We have draft letters that landlords can send to tenants, and the notices landlords can serve, plus there is a section on getting a country court judgement without possession.”

Eviction is the last resort

No landlord wants to evict a good tenant and usually eviction will be the last resort. The court process can be time-consuming and confusing.

Ms Shepperson explains the importance of research before going to court: “All landlords need to be compliant with the law. If you haven’t complied with the various rules then it is going to impact your ability to evict.

“For example, if you haven’t complied with the deposit rules, then you won’t be able to use section 21, and your tenant can claim the penalty for non-compliance if you evict on the basis of rent arrears.

“Before you start the proceedings you need to research the correct procedure for your situation.

“Most tenancy types are ASTs, but in some cases, you may not be able to use Section 21. It may be better to use another procedure.”

Ms Shepperson adds Landlord Law has free guides to help landlords deal with the eviction process.

She said: “We have two free guides to this on Landlord Law.

“One of them is called the tenancy trail. Most landlords know what their tenancy type is, but if you are not sure, then you can use the tenancy trail to check this.

“The other free guide is the Which Possession Proceedings guide which leads you by question and answer to the most appropriate possession proceedings for your situation.

“If you use the wrong process, then your case will likely be kicked out by the judge, and they may order you to pay your tenant’s legal costs.”

Ms Shepperson adds that difficult situations might require a solicitor.

She explains: “The court process still takes a very long time. You will be very lucky if you get a possession order within six months, so it’s really important not to start the wrong process; otherwise, you have to start all over again.

“If you have a complex situation, it’s probably best to use solicitors or a regulated firm such as Landlord Action. Although it will cost you, it’s much better than getting it wrong.”

Rules and regulations landlords need to follow

Landlords have to follow a lot of rules and regulations, but the exact number isn’t clear.

She tells Property118: “There are a lot, but it depends on how you categorise things. On Landlord Law, we have a legislation page, and I provide links to 24 statutes and 26 statutory instruments, but there are many others.

“Some people say there are 150 or 400 pieces of legislation, but as they never actually list them,  we can’t go and count them.”

Ms Shepperson emphasises it’s essential for landlords to receive proper training before entering the sector.

She said: “Failure to comply with some of these regulations can be very expensive and cause problems in the long run. It’s a good idea to use a reputable letting agent or be a member of Landlord Law which will help you comply with all the rules.

“At Landlord Law, we’ve got an audit kit that helps landlords check if they’re following all the main rules and regulations.

“You can go through it once a year or whenever you get your property back, just to make sure you’re on track.

“The kit covers everything from property inspections to tricky stuff like pets and damp and mould. It’s also great for landlords who use letting agents, helping you make sure they’re following the rules and giving you good service.

“If you’re a Landlord Law member, you get free access to the audit kit.”

Finding the right tenancy agreement

Landlords sometimes struggle with finding the right tenancy agreement which can lead to confusion.

Ms Shepperson explains the most common types of tenancy agreements.

She said: “You need to have the right type of tenancy agreement for your tenancy type. For example, if you have a company let, you should have a tenancy agreement designed for a company let.

“If you have an assured shorthold tenancy (AST) you need to have one suitable for an AST.

“Most tenancies at the moment are assured shorthold tenancies. It’s important to remember the tenancy agreement should be fairly recent”.

“We have tenancy agreements members can access on Landlord Law. I update them regularly whenever there’s a legal change so that the tenancy agreement complies with all the rules.”

Ms Shepperson explains the risk of downloading a free tenancy agreement from the internet and highlights the importance of addressing right-to-rent issues.

She tells Property118: “If you download a free agreement from the internet, you have no guarantee that it complies with all the legislation.

“A tenancy agreement can do a lot to protect you if you are a landlord. In England, verifying tenants’ Right to Rent is crucial, especially with increased fines this year.

“Your tenancy agreement can protect you by clearly stating who is allowed to live in the property, such as the tenant and permitted occupiers.

“It should include a clause prohibiting others from living there. If a tenant allows someone else to live there, they are breaching the agreement.”

She adds: “If the Home Office contacts you about unauthorised occupants, you can demonstrate that you’ve limited who can live at the property and the tenants are in breach of the tenancy agreement.”

Many landlord insurance companies now require landlords to do regular inspections

Ms Shepperson explains some of the most common mistakes landlords make when managing a rental property.

She says: “The worst thing is landlords not checking tenants properly. Most landlords will agree that the most important thing to have is good and decent tenants who will behave in the property responsibly.

“It’s so important as if you haven’t got good tenants then it’s going to make your life harder as a landlord.

“Not doing inspections is another big problem. Nobody really likes doing inspections as the landlords feel they are imposing and intruding on their tenants, and the tenants don’t like someone coming in and poking around.

“From the landlord’s point of view, it’s really important that you do the inspections as that’s where you pick up on things that could be wrong.  Such as unauthorised occupiers living there, or the tenants could have turned the property into a cannabis farm.”

Ms Shepperson highlights the increasing requirement by landlord insurance companies for regular property inspections and offers guidance on inspection frequency.

She explains: “Many landlord insurance companies now require landlords to conduct regular inspections. Failure to do so can affect the company’s liability, and they may refuse to cover expensive damages if the landlord hasn’t performed these inspections.

“It does depend on the circumstances, but three months should be the starting point for inspections. If you’ve got really good responsible tenants who have been in the property a long time then you could do an inspection every six months.

“For some HMOs, landlords will go round every week, but it very much depends on the property.”

She added: “One of our most popular products at Landlord Law is our Property Inspection Kit which includes really useful things like what to do if a tenant won’t let you in to do an inspection and how to prepare for an inspection.

“The kit is included in some of our Landlord Law memberships; otherwise, you can buy it online.”

General uncertainty around Renters (Reform) Bill

Ms Shepperson explains the uncertainty of the Renters (Reform) Bill is causing huge problems for landlords.

She said: “My main view about the Renters Reform Bill is that the general uncertainty and delay surrounding the Bill is causing problems. One of the things that businesses need is certainty and at the moment we don’t have certainty.

“We have the Renters (Reform) Bill and we know more or less what’s in it but it hasn’t received Royal Assent.”

Ms. Shepperson expresses concerns about the potential impact of a Labour Party victory in the general election.

“We don’t know what the Labour Party will do,” she explains.

“We know they want to ban Section 21 but in their recent ‘Six Steps’ announcement they mentioned nothing to do with housing which is another big uncertainty.

“The more uncertainty, the more landlords will sell up which is bad for the country as a lot of people rely on the private rented sector as it’s the only way they can be housed.

“There’s very little social housing and to buy a property is very expensive. The sooner the government try to resolve the housing crisis the better.”

Find out more about Tessa’s service at www.landlordlaw.co.uk.


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Tessa Shepperson

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13:41 PM, 29th May 2024, About a month ago

I hope you enjoyed watching my interview. It was, of course, recorded before the General Election was called!

You may notice that in some places there is a Landlord Tax picture on the screen. Please note that this is a Property118 service, and Landlord Law does not provide tax advice.

So, if you have a tax issue, either use your existing accounts or the Property118 service. If you have a legal issue, we may be able to help. See this page: https://landlordlaw.co.uk/what-is-your-problem/

If you have any questions about the issues raised in my interview, feel free to post them here, and I will try to answer if I can.

Judith Wordsworth

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11:19 AM, 30th May 2024, About a month ago

The RRB may well be resurrected under whichever Government is in power on 5th July.

BUT hopefully whoever is in power will reflect on the need to work WITH and not crucify PRS landlords and re-word. And there is plenty to redraft as some of the clauses are so badly drafted as to be laughable if not so serious!

If all we PRS landlords gave a s21 notice on the same day to expire on the same date 4.7 million tenants could be homeless without any accommodation to go to. Suggested this when the RRB first raised it's head. Shame the suggestion wasn't taken up to wake up Government and LAs to the useful service many of us provide that they can't.

Well saying that my LA, and have it from the horses mouth, is currently bulk buying tents! So ............

JB

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11:33 AM, 30th May 2024, About a month ago

Angela Raynor has said she will ban section 21's the day they get in government, regardless of any court reform.
Labour have also said that selling won't be a mandatory reason to get possession.
I plan on serving some section 21's before 4th July as I want to sell and can't afford to have that blocked. It's anyone's guess if Red Angela will try and ban section 21's already served.

Tessa Shepperson

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11:36 AM, 30th May 2024, About a month ago

These are policy issues which I can't help with!

For information, I am doing a series of posts on my Landlord Law Blog about housing and the election which may be of interest: https://www.landlordlawblog.co.uk/category/election-2024/

Jim K

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12:31 PM, 30th May 2024, About a month ago

Reply to the comment left by Judith Wordsworth at 30/05/2024 - 11:19
I detect a sense of either irony ir desperation.....

PH

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12:45 PM, 30th May 2024, About a month ago

Reply to the comment left by JB at 30/05/2024 - 11:33
I can't see how any government can put a blanket ban on landlords selling THEIR OWN property. It maybe possible to introduce a time window of X number of years that a tennant has to be residing before selling can be used as a mandatory ground but absolutely outlawing selling is complete nonsense. It would face major opposition and would bring the PRS to and end resulting in major homelessness.

JB

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13:02 PM, 30th May 2024, About a month ago

Reply to the comment left by PH at 30/05/2024 - 12:45
Well that's what they may do! Such is their distain for landlords

Tessa Shepperson

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13:10 PM, 30th May 2024, About a month ago

Reply to the comment left by PH at 30/05/2024 - 12:45
Landlords can always sell with the tenant in situ. So, it's not true to say that landlords can't sell at all.

There is also the mandatory ground 1 if you need the property back to live in yourself. It's not mandatory to have lived there previously in that case.

Cider Drinker

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18:14 PM, 30th May 2024, About a month ago

Reply to the comment left by Tessa Shepperson at 30/05/2024 - 13:10
That’s true - at the moment. Who knows what the loony Left will do?

Monty Bodkin

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8:57 AM, 31st May 2024, About a month ago

Reply to the comment left by Tessa Shepperson at 30/05/2024 - 13:10
"Landlords can always sell with the tenant in situ."

....for half price.

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