Reducing/avoiding rent arrears  – I’ll have some of that please

by Mary Latham

14:47 PM, 20th March 2012
About 8 years ago

Reducing/avoiding rent arrears – I’ll have some of that please

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Reducing/avoiding rent arrears  – I’ll have some of that please

After reading Experian launches rent payment profile for tenants, I am perfectly prepared to give a person a chance for a new start but I cannot afford to take people who will not pay their rent. Many landlords feel like this too. Many of us are in a position to pick and choose our tenants and just won’t take a chance but we all need to remember, as the all financial investments warn, “Past performance is no guarantee of future” and those landlords who avoid tenants on LHA are just one P45 away from that tenant.

In my opinion, Experian are offering financial inclusion for the many people who have gone through a difficult time and have poor or no credit history. Most of us have made mistakes but unless we are allowed to move on we cannot get our lives back on track. Landlords are often nervous because we have no idea which people are trying to move on and which are going to continue to be bad payers. This, in my opinion, will help us to sort out those two groups and reduce the risk when taking a new tenant.

Even tenants who have had a long good credit history can lose their jobs, go out of business, end a relationship and all these things impact on the financial stability of that person and can ruin their credit rating. Many tenants become trapped when they take expensive loans to get them to pay day and they will now qualify for more affordable loans which will put less pressure on them and enable them to continue to pay their rent.

This is what I am going to do to use this service to help me with two of the biggest problems facing landlords in the PRS at the moment – to protect those rent payments and prevent antisocial behaviour:

  • Every person who wants to take one of my properties is going to be told-
    1. I will be checking your credit rating with Experian and this will include your rent payment history
    2. I am a member of LandlordReferencing.co.uk and I give all my tenants a reference at the end of the tenancy – what that reference says is entirely up to them but I prefer that it is a good one with no rent issues or antisocial behaviour
    3. Payment of rent will now impact on their credit history through Experian, who are now adding rent payment history to their credit rating, this will give them an opportunity to build a good credit rating or may spoil an existing rating which again is entirely in their hands
    4. My referencing process will give me both a credit rating and a lifestyle reference because I am careful not to take tenants who will upset other tenants and neighbours. This way, they can be sure that they will not be living close to other tenants who will spoil their enjoyment of the property
    5. If they have had past issues but have built up a good record of previous rent payment and life style I will offer them a tenancy
    6. I am on good terms with the neighbours who will not interfere with them but will inform me if there are any problems.
    7. I do not accept large advance rent payments but I will take the normal six weeks deposits, one month’s rent in advance and a guarantor with a good reference/credit rating if their own is poor.

The reason for this last point is that I have often been approached by people who have lived abroad, have lost their jobs, who are recently separated or divorced or people newly out of education and often they have no credit rating in this country or their financial history is tied up with a previous partner/spouse.

  • When I house students I will tell them that this system will give them the opportunity to build a credit rating by paying their rent and utility bills on time and in full and that this will help them when they leave education and begin their “real” lives.

Loss of rent, damages and antisocial behaviour are the biggest potholes in a landlord’s road I now feel better equipped to spot and avoid them.

Experian have changed the landscape for landlords, reducing the risk and encouraging tenants to prioritise rent payments–

I love it!



Comments

19:07 PM, 25th March 2012
About 8 years ago

All very good, except the nosey neighbours.

No idea how they can reduce arrears.

Tenants have a right to live without interferance and spying neighbours. May as well isist on cctv and he done with it.

If a neighbour calls regarding damage to property then fine of cource but were is the line drawn.

Mark Alexander

19:10 PM, 25th March 2012
About 8 years ago

Adam, telling prospetive tenants about the local neighbourhood watch and nosey neighbours makes good tenants feel more sucure and puts off criminals, especially those acting for cannabis growers.

Mary Latham

19:51 PM, 25th March 2012
About 8 years ago

....... and the gang masters who put wall to wall mattresses in the property and rent them by day and night to the illegal workers
...... and those ladies who intend to run a "business" from your property

2:50 AM, 26th March 2012
About 8 years ago

I think the phrase 'peaceful enjoyment' which all tenants are entitled to is the pertinent one.
However this also refers to their neigbours who are also entitled to peaceful enjoyment of their properties.
If one has a tenant that expects such 'peaceful enjoyment' but doesn't allow neigbours etc to have any then he will have to forfeit his tenancy and have a resultant negative lifestyle reference.
This may well prevent him sourcing a tenancy eslewhere.
Only he will be to blame for that situation occurring.
So if a nosey neighbour brings to attention to a LL the fact that his peaceful enjoyment is being compromised by the LL's tenant then remedial action will have to be taken by the LL or  the tenant will have to leave.
There is an ultimate council sanction of closing down a property for occupation if such ant-social behaviour continues.
This applies to the PRS not just council property.
Therefore no LLis going to retain a tenant which could cause ultimately the council to step in and shut the property down.

Mary Latham

9:13 AM, 26th March 2012
About 8 years ago

Paul In reality most landlords I speak to are able to resolve the issue without removing the tenant.  Many people, including both owner occupiers and tenants are unaware that their behaviour is causing problems to others and when it is pointed out to them they stop.

One of the worse situations I had to deal with was a property where four music students lived in between two houses that were also occupied by students.  The music guys were practising at home and the other students could not study.  When I spoke to the music students and asked them to practice during reasonable daytime hours they told me that it was difficult for them all to practice at the same time because each would distract the other with their "piece" and that therefore they were taking turns.  I explained that this meant that the neighbouring students could not study because there was constant music coming through the walls and that this may impact on their ability to pass their exams.  We agreed a time frame that was within the hours of 11.am and 4..pm when the neighbouring students were out of bed and at univerisity most days and this worked. During the discussions I introduced the students to each other and asked them to talk to each other if there were any problems in future - people are less likely to be thoughtless when they know each other.

9:16 AM, 26th March 2012
About 8 years ago

It's not just about protecting landlords from losing rent or stopping the damage to their property, it is about making sure their good tenants are safe and comfortable;
because there is simply no money or security for a landlord who
keeps losing good tenants just because a bad one moves in or lives next
door.
It is also a fact of life that an unhappy tenant will become un-caring and
un-paying tenant and that also includes being unhappy because of
antisocial neighbours.

8:42 AM, 3rd April 2012
About 8 years ago

Has anyone had thier HMO's reassessed for council tax, I have !!
 I have 3 properties and now all my tenants pay thier own council tax, aprox. £800 a year to live in one room and sharing bathroom and toilet !! its imoral and yes I've appealed twice but still lost, now have to reduce rent to let rooms and tenants I've had for over 10 years cannot afford to stay, others have gone onto benifits !!!
Huge impact on rents for working people at the bottom of the ladder !!

20:47 PM, 3rd April 2012
About 8 years ago

As more councils realise what a money making wheeze HMO registration is more LL will face the issues you have had and  this means more tenants will have to leave or go onto benefits.
Surely a case of unintended consequences!?....Or not!?


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