Trust me – I am a landlord

by Readers Question

11:34 AM, 14th February 2014
About 5 years ago

Trust me – I am a landlord

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Trust me – I am a landlord

My tenant wants some long term assurances of tenure

I’ve been renting properties for several years and I always advertise that I’m looking for long term tenants.

I reference my tenants properly and I always purchase rent guarantee insurance. Despite never having to claim on an RGI policy it does give me peace of mind. I never want to make a claim either and the fact that I’ve never had a tenant in arrears or causing the sorts of damage and anti social issues I often read about has to be a good thing, but I digress. Trust me - I am a landlord

I’m in this business for the long term, well at least another decade or so at least, so I want good tenants and I want them to stay long term because that’s what keeps my business profitable.

In the past I’ve not had many people challenge me on this and when I have I’ve simply given my prospective tenants the telephone numbers of some existing tenants so they can call them and have a chat about what sort of landlord I am. Obviously I get the permission off my existing tenants to give out their details and this has never been a problem before.

This week I showed a lovely couple around my property and I have no doubts whatsoever that they will make ideal tenants. They are very cautious though because they’ve been promised they can stay long term before and have had to move twice in the last 14 months against their will because their landlords have decided to sell up or move back into their former homes. They are asking me for a 5 year lease but I am loathed to give them that just in case. I’m also worried that Mortgage Express who are my mortgage lender might even repossess my property if I do offer them a long term deal on the basis that I will be in breach of my mortgage conditions.

I interested to know whether other landlords have encountered this scenario and if so, how did you deal with it?

Normally I would just give tenants a six month AST and then continue with a periodic tenancy thereafter. I can’t see the point in issuing a new AST as it increases my risks as well as costs associated re-protecting the deposit, not to mention the hassle factor.

Your thoughts would be much appreciated.

Many thanks

Albert Dunning



Comments

Mark Alexander

11:48 AM, 14th February 2014
About 5 years ago

Hi Albert

I'm pleased to say you are not the first person to ask me this question.

About 12 years ago, a lady who worked for me on a part time basis was in a very similar predicament. She had always rented and probably always will. She had a disabled daughter and staying in the same area and keeping her daughter at the same school was very important to her. Much like your tenant, she had been promised the earth by accidental landlords, only to be moved on twice when these accidental landlords had a change of circumstances.

I didn't have the answer for her at the time but it did alert me to an issue which I had not previously considered.

My outlook is very similar to your own in that I really do want long term tenants. With this in mind I set about a plan to differentiate myself from all the accidental landlords out there. I got some top legal advice which addressed all of the issues you have mentioned and that lead to the creation of a "Deed of Assurance" see >>> http://www.property118.com/deed-of-assurance-1/32440/

When I started Property118 I decided to create a "hallmark" for landlords who shared a similar strategy to my own and that's when I came up with The GOOD Landlords Campaign.

I have been offering Deeds of Assurance now for several years. I find that it helps me to secure the very best tenants and they often choose my property over other just on the basis of the additional assurances that I can offer them.

Please take a look at the link I have posted above, I genuinely think that's the answer you and your prospective tenants are looking for.

All the best 🙂

Mark

PS - we also had a big debate about long term tenancy agreements vs Deed of Assurance here at Property118 in June of last year. Please see >>> https://www.property118.com/the-private-rented-sector-evolution-deed-of-assurance/40949/
.

Industry Observer

11:52 AM, 14th February 2014
About 5 years ago

Knew you'd be first in with your beloved DoA Mark!!

The simple solution is of course a long fixed term done by Deed if 3 years dead or longer and no break clause.

But I understand how your Deed works and it is a solution.

Jeremy Smith

11:55 AM, 14th February 2014
About 5 years ago

Reply to the comment left by "Industry Observer " at "14/02/2014 - 11:52":

You can't beat him to it IO, he puts it up there as a thread in the first place...
- we stand no chance ! 🙂

Mark Alexander

12:18 PM, 14th February 2014
About 5 years ago

Reply to the comment left by "Industry Observer " at "14/02/2014 - 11:52":

As Albert has stated, he's with Mortgage Express so your suggestion would put him in breach of his mortgage terms and at risk of having his loans called in if he went along with it.

He could of course refinance to TMW (subject to status, LTV) etc. but that would cost a small fortune in fees, he'd be paying a lot more in interest margins and he wouldn't be able to use s21 for three years if he really needed to.
.

Mark Alexander

12:27 PM, 14th February 2014
About 5 years ago

Reply to the comment left by "Jeremy Smith" at "14/02/2014 - 11:55":

Too true!

I very rarely publish a readers questions article until I have researched and pre-drafted my initial response. I then copy/paste my response into the comments system before I send the notification emails, Tweets, Facebook share's etc.

Obviously it's both important and interesting to read other people's views too though. I've learned a LOT from doing so over the last three years since I founded Property118 🙂
.

Romain Garcin

12:46 PM, 14th February 2014
About 5 years ago

I don't think they will find any landlord to grant them a 5 year fixed term, especially not knowing them.

Mark Alexander

13:03 PM, 14th February 2014
About 5 years ago

Reply to the comment left by "Romain " at "14/02/2014 - 12:46":

I would happily offer them a 5 year Deed of Assurance from what Albert has said, subject to referencing to RGI standards of course 🙂

13:40 PM, 14th February 2014
About 5 years ago

An alternative view ...

Several years ago, I suggested that tenants should start vetting landlords:

https://www.propertytribes.com/tenants-to-start-vetting-landlords-t-178.html

It received this excellent comment from landlord Stephen Fay:

I always explain to tenants that I am a professional landlord, and that each prop is a permanent investment ... meaning I will not be asking them to ever move out because I want to move into the prop.

I give an overview of how we do things i.e. professional set-up, registered with the RLA, members of mydeposits.co.uk, all props have gas safety certs, electrical certs, BTL insurfance policy, and explain that all props are are maintained in A1 condition.

I provide a copy of my driving license and the Land Registry print showing the prop address, and my personal address (i.e. proving that this is an investment property).

I also explain that at least 20% of the rent they pay is my "profit" (actually, some are much, much higher, but it wouldn;t go down well to be too truthful!), and this means I have the money to pay for the inevitable repairs and maintenance. I explain that you really don;t want your landlord to be making a loss!

I invite tenants to telephone some of our older tenants, for a personal reference (after having asked the tenants if they mind!). I ask prospective tenants to talk to our existing tenants about rent rises (modest), repairs (rapidly dealt with), and how we have helped during difficult times (e.g. tenant pays late due to redundancy / benefits not paid / tight month / etc).

All this helps to create the impression of (a) professionalism, and (b) security. As a parting request, I ask prospective tenants to ensure that they discuss these topics with the agents or landlord of any other props they are viewing.

It's amazing how many completed applications I receive back, and holding deposits!
__________________________________________

Tenants can also use the social web to vet a landlord by putting their name into google.

I am more than happy for any tenant to google me, as they will see from my content that I run our portfolio like a business and they are more assured of a long term tenancy because of this.

They will also avoid landlords on Facebook groups talking about their "tenant scum"!

Google is a great tool for both landlords and tenants to do due diligence on one another and will become more important as time moves on imho.

Mark Alexander

13:47 PM, 14th February 2014
About 5 years ago

Reply to the comment left by "Vanessa Warwick" at "14/02/2014 - 13:40":

I totally agree with everything you've said here Vanessa. I do all of that as well as offering a Deed of Assurance. Superb post by the way as many others will learn from it 🙂

Industry Observer

18:37 PM, 15th February 2014
About 5 years ago

Vanessa

With no matter what best altruistic motives and I know you (and Mark) have them, NEVER EVER give your personal address to a tenant.

EVER unless legally you never have any alternative e.g. self managing and needing an address for s48 purposes.

Single biggest advantage of using an agent - ability to hide behind them

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