Should we try to evict our tenant?

Should we try to evict our tenant? Many Landlords have asked the same question and in these current times it’s far from a straightforward question.

I was contacted by Katherine Denham of The Times to help answer this question from one of their readers. (Well worth registering, you get a full month free and can cancel if you don’t want to continue)

As well as being a mortgage broker, I am also a landlord and have been in the situation of trying to decide the best course of action for a tenant that has fallen into arrears.

A times reader has a small property that is let to help supplement retirement income. A common situation these days.

Their tenant has become more and more unreliable in paying the rent. The tanacy is under full management of a letting agent and part of their guaranteed rent scheme.

The agent in this case has decided that with the pandemic and this tenants arrears that they will remove the guaranteed rent cover.

The reader is now in the quandary of either terminating the contract (6 month minimum notice under current regulations) or wating until the regulations return to pre-covid norms.

Their concern is that the tenant may stop paying altogether.

The Times, Katherine Denham says: “Lots of people are struggling financially during the pandemic and this has affected their ability to meet their rent or mortgage payments.

You haven’t said why your tenant has missed rent, but I wonder if it is related to Covid.

I can see why you are worried about your income, particularly if the rent payments are part of your pension. It is always wise to have cash reserves to cover any void periods, but six months without rent payments would test any landlord, particularly if you have a mortgage to pay.

The first step is for you or the letting agent to have an open conversation with the tenant to understand why they haven’t been paying rent on time.

Kristjan Byfield from the lettings service Base said that communication is always the best way to deal with situations like these, so having a sensitive chat with your tenant about why they are struggling with payments might help to solve the problem.

It sounds like you are worried that giving your tenant notice to vacate will give them reason to stop paying completely, but bear in mind that the contract remains in full effect during the notice period and the tenant is still required to pay you.

The vast majority of tenants won’t choose to be in arrears, so try to understand their personal situation. If you can, it’s better for everyone if you reach a mutual agreement rather than involving the courts.

If the tenant is worried about getting into arrears, they might be happy to leave your property sooner than six months.

Another option is to come to an agreement with them to reduce their rent or to pay what they can afford now.”

I agree with Katherine that you need to explore every avenue as it can avoid a lot of hassle and loss of income.

I said: “Once things get back to some form of normality, you could agree on a payment plan with the tenant to pay down the arrears, which is what I have done with one of my tenants.”

“These are unusual times, so it might be best to ride things out as it might be a case of out of the frying pan and into the fire with a new tenant.”

There are many factors to consider in a case like the above. For example, depending on the area, you could struggle to find a new tenant leaving a void and no income.

If you can agree a payment plan with a tenant and they fail to follow the plan and make the payments, then you should consider issuing notice.

Guaranteed Rent schemes can vary enormously and it’s always worth reading the smallprint of the policy to see exactly what is and isn’t covered as some of the policies provide very little cover if something goes wrong.

These are indeed strange and challenging times for everyone and landlords have been hit disproportionately hard.

I hope they manage to find a solution.

If you need more advice and would like to discuss your situation, don’t hesitate to give me call on 01625 548248 or email enquires@mortgagesavers.co.uk

You can also enquire via our website https://mortgagesavers.co.uk/