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Guild Blog: What Should I Do When a Tenant Won’t Pay Rent?

What Should I Do When a Tenant Won’t Pay Rent?

 

You’ve found the perfect tenants, they’ve moved in without issue, and you’re expecting smooth sailing with the tenancy. But then you check your bank account and find that rent hasn’t been paid that month. What do you do? Guild Members share their expert advice to help in this tricky situation. 

 

1. Communication 

All of our agents agree that communication is key to keep track of payments and to resolve an issue with tenants.

First of all, it is important to check to see if rent is due on time, rather than realising later in the month.

“Check your bank statement the day after the rent is due,” advises Louise Cawley from Newland Rennie. “Your tenant has a responsibility to pay rent the same day every month as if he/she were paying a mortgage, the rent should never be late. If the rent has not come in there may be a simple explanation, a telephone call to the tenant may sort the matter out very quickly.”

“When a tenant defaults with their rent, the first steps are to contact them,” said Suzanne Bellamey of Jackson Green & Preson. “Non-payment of rent does not always mean you have a bad tenant. Sometimes their personal circumstances may change throughout the tenancy, such as losing their job or suffering from ill health and relying on sickness benefits.”

If a miscommunication has happened in the past, now is the time to fix it.

Sarah Green from Mundys says: “Communication is key with tenants to enable the right course of action to be taken in the event that a tenancy is not running as planned. You need to ensure that all the correct information and guidance is provided to the tenant at the commencement of the tenancy so that the tenant is clear on what, when and how payments can be made.”

 

2. Clear records 

Be sure to keep clear records of all communications and decisions while you are trying to get rent from the tenant. It may be needed in court, though hopefully the dispute won’t reach that stage.

Sarah Green from Mundys said: “You should ensure that you keep a record of contact with the tenants, a clear statement of account and copies of letters or notices served to a tenant.”

 

3. Guarantor 

Does your tenant have a guarantor to pay their rent if they are unable to? Now is the time to find their contact details.

Sarah Driscoll from M&M Estate & Letting Agents says: “Remind the guarantor of their agreement to pay the rent should the tenant not be able to. As with the tenants, keep any conversations and emails professional.”

Emma Foreman from Complete Property agrees that talking to the guarantor could solve the problem.

“If you have a guarantor for the tenancy, speak to them immediately as it is likely that they are unaware of any rent issues and may be in the position to pay the rent over directly themselves,” she says.

4. Insurance

Landlord insurance is always a good idea to have in case of situations like rent not being paid.

“If you have any form of landlord insurance now is the time to review the terms,” says Sarah Driscoll from M&M Estate & Letting Agents. “Should you need to make a claim, you want to make sure you have adhered to the T&Cs of the policy. Depending on your insurance, you may find they take things out of your hands.”

Suzanne Bellamey from Jackson Green & Preston has further advice on landlord protection. “I recommend that all landlords take out a ‘Rent Guarantee’ cover offering legal cover, rent arrears and offers financial help for part of the empty period of the property once possession has been obtained through the courts, whilst the property is either being re-advertised or brought back to a satisfactory standard, paying part of the monthly rent.”

Steve Thompson from Thomas Morris says: “A good policy will protect against lost rent when a tenant stops paying but does not vacate a property and will also cover the legal costs involved in recovering possession of the property. This is something we would strongly recommend to any Landlord, though it is important to check and understand the full details of any policy and the cover it provides.”

5. Timeline 

So what should your communication plan of action be?

“When a tenant doesn’t pay, the first thing is a call, email or text to the tenant (the initial check) to ask why,” suggests Joe Gervin, in-house solicitor and Director of LPS in Liverpool.

“Keeping a record of all initial communications is key in case it is required as evidence in court. We would normally recommend a grace period of seven days from due date to allow for banking logistics. If the initial message or call doesn’t work then a formal letter requiring payment forthwith (usually in 7-14 days) is required. Keeping a copy of this letter is imperative. If rent is still not received, then attendance at the property is required. Give 24 hours’ notice that you will be attending to inspect the property to discuss arrears.”

6. Legal

If communicating clearly and giving the tenant time to pay hasn’t solved the issue, it is time to consider legal action.

Sarah Green from Mundys says: “If a landlord is experiencing difficulties with a tenant, speak to the letting agent who will provide guidance on how the matter can be handled. A Legal Adviser and Landlord Bodies such as National Landlord Association can also provide useful advice and guidance for members.

“In the event that the tenant is not keeping up to date with their payments and the landlord is unhappy, it is important to serve the correct section notice at the correct time. A Section 21 notice provides the tenant with a minimum of two months’ notice, coinciding with the fixed term of the tenancy, of the Landlords intention to regain possession. A Section 8 notice can be served where a tenant is two months in arrears and provides a shorter two-week notice of the landlord’s intention to regain possession. Serving the appropriate notice promptly can stop the issue escalating.”

Jenny Owen, Sawyer & Co agrees, though recommends leniency if the tenancy has been successful up to that point.  “If the tenant has always paid on time in the past it, depending on the situation you may decide that giving them a small period of breathing space to catch up is fine, otherwise depending on how long they’ve been in the property, you have the option of contacting your solicitor and serving notice under Section 21.”

The Guild recommends seeking the help of a qualified advisor, such as a solicitor, to get the best advice before serving a legal notice.

 

7. Solutions going forward 

If you are able to resolve the problem and the rent is paid, it is worth looking at solutions to make sure the tenant can pay on time in future.

“If you understand the reason for a late or non-payment of rent, you are able to look at simple solutions. For example, an alteration to the rent payment date so it coincides with the timing of work incomes, or a payment plan if the tenant is struggling to make a single larger payment per month. This will prevent the situation from escalating.”

Guild Members make great letting agents. Find your closest Member here and find out more about lettings services today.   If you would like any advice about a rental property then please contact our experienced Lettings Department on 01765 694802 or 01845 522680.

Guild Blog: How Many Homes Should You Look at Before Making an Offer?

Looking for your perfect property can be an exciting experience. Once you’ve searched online and spoken to your local Guild Member about what you’re looking for, it’s time to start the viewings. But how many should you do before you make an offer? What if your first property seems perfect? Should you keep looking? Guild agents share their top tips. 

 

Finding the perfect house on the first viewing – what do you do? 

Steve Thompson from Thomas Morris said: “There are difficulties involved in finding what appears to be the perfect property very early in a search; many buyers will be concerned about taking the plunge when they haven’t had the opportunity to shop around and see how other properties compare.

“Not securing the perfect property however, could come back and haunt you if someone else secures it before you make a decision. So, if you fell its right – go for it! Getting out and viewing a range of properties early on will help to avoid this as it will help to ensure that the perfect property can be identified if it stands out from the crowd.”

 

Kevan Wimborne from GBP Estates agrees, and he has personally made offers on the first property that he has seen before.

“Trust your judgement – if it ticks all your boxes, why not go for it?” he asks. “What more are you hoping to find elsewhere? The rest might not match up. Go back for a second visit immediately with a friend or relative for another opinion and if it still excites, make an offer.”

 

Remember to do your homework before a viewing, says Zoe Hayle from Marshall’s, and there should be no doubt when you find the right home. “If you have done your homework and know the area you want to settle in, then when you find the perfect home you really should offer on it. There is a lack of properties coming to the market now, with many people trying to find one. If you don’t offer, someone else might and if you have missed your favourite then no other property will match up.”

Outside of house

How many viewing should you do per day?

Brian Carlisle from J R Hopper & Co has a recommended number of properties to view per day.

“View at least two or three homes, preferably with the same agent, on the same day. This allows you to compare and rank properties in terms of ticking the boxes and value. Don’t view more than five or six in a day. You will get exhausted and will not make rational decisions after too many viewings,” he advises.

 

Always have a viewing 

Rather than discounting something online, Steve Thompson from Thomas Morris recommends viewing all properties that you are interested in.

“I do think it’s important that people get out and view a number of properties rather than trying to do their property shopping predominantly on the internet,” he said. “Properties and locations can look and feel very different in the flesh, and there is a risk of passing up an ideal home by discounting it without a visit.”

 

Make an offer 

Brian Carlisle from J R Hopper & Co points out that it is acceptable to put an offer in on multiple properties.

“It is perfectly possible to place an offer on more than one property, providing you are happy to go ahead if any of those offers are accepted. Look at your very short list of properties you would buy at the right price. Decide what you are prepared to offer on each and make the offers. Make sure the agents know you are offering on other properties.”

two front doors

Can you view too many homes? 

Gina Burbidge from Royston & Lund says: “Before making an offer on a property, it is advisable to view as many as possible. Try and view a range of properties in the areas you are considering buying to compare as much as possible.  Although you can’t view too many properties, if you see something you are interested in in a fast-moving market, it would be advisable to make an offer as soon as you could to ensure you don’t miss out.”

 

Kevan Wimborne from GBP Estates personally prefers to view fewer properties, but he understands that everyone is different. “By the time you have seen 20 – 30 properties, they begin to all seem similar. Then you possibly decide to ‘settle’ for a property which really wasn’t as good as the first one or second one you saw, but you now need to find something whilst you still have the will,” he jokes.

 

Ultimately, there is no right number 

The right number of properties to view will be different for each person, points out Mike Coles, from Debbie Fortune.

“The amount of properties you choose to look at really depends on yourself. You could look at hundreds of properties online on the properties portals, view loads through your local agents, but never find the one you have in your mind’s eye. Then again, you could get lucky when you find your dream home at your local Guild agent’s window, and it’s perfect when you view it. “Don’t be afraid to look into things and ask loads of questions because it will be the largest purchase you might ever make. Remember it’s down to you and listen to the advice given to you by your agent.”

 

 

To discover homes on the market with your local independent property professionals, find your area’s Guild agent here. 

Guild Blog: New Rules for Portfolio Landlords Now in Place

Are you a Portfolio Landlord?

 

Portfolio landlords – those with four or more mortgaged buy-to-let properties – now face more stringent checks by lenders when buying additional properties.

Since the end of September, new portfolio lending rules issued by city watchdog the Prudential Regulation Authority mean that lenders must look at a landlord’s entire property portfolio when deciding whether to offer them a buy-to-let mortgage on a property.

The rules have been introduced to provide lenders with greater certainty that landlords will definitely be able to afford any additional borrowing they take on.

 

Different lenders, different approaches

Many lenders have confirmed that they will continue to provide buy-to-let mortgages to portfolio landlords, although they will require much more information about their existing properties before they will accept a new application.

Other lenders, however, put off by the longer underwriting process and an increase in paperwork, have taken the decision to move away from lending to portfolio landlords following the rule changes.

Some have said that although they are not prepared to accept new applications for additional buy-to-let lending from portfolio landlords, they will still consider remortgages, but only if they are on a like-for-like basis.

 

What portfolio landlords can do to prepare

  • Landlords with multiple properties who are planning to add to their portfolios can help speed the mortgage application process along by making sure they have all the information lenders will require ready in advance.
  • Lenders will want to understand any existing mortgages already in place, as well as the amount of rental income each property in the portfolio brings in, along with any expenses, such as maintenance costs. They are also likely to look at your assets, liabilities and cash flow.  This is so they carry out an assessment of affordability right across the portfolio, to be certain that you won’t be over-exposing yourself financially by increasing your borrowing.
  • There are other rules which have recently come into effect which also affect landlords. For example, lenders now need to impose a ‘stress test’ for the first five years of the loan when you apply for a mortgage, so that they can check you’d still be able to afford monthly payments if rates go up.  However, they may adopt a more flexible approach if you are applying for a five-year fixed rate buy-to-let mortgage as if rates do increase during this period, your monthly payments won’t be affected.

 

The Guild has partnered with L&C Mortgages, the UK’s largest fee-free mortgage broker. You will be able to get expert advice at the end of a phone when it suits you. Their expert advisers are on hand 7 days a week and will manage a full search of the mortgage market so you don’t have to.  Over 1 million people have come to L&C for fee-free expert mortgage advice, so you know you can trust them to help you too.  Call L&C today on 0800 923 1945 or click here to find out more

 

 

Guild Blog: Government Launches Consultation into House Buying and Selling

This blog features our very own Sales Manager, Stefan Collier!

If you would like any further advise then please pop in to see our knowledgeable Sales Department who will be able to offer you advise on all aspects of sales.

 

 

We asked our Guild agents what their thoughts and opinions were on the recent government inquiry: “Government launches consultation into house buying and selling”.

 

Zoe Hayle, Marshalls & Parsons
“The Government consultation needs to address the whole buying process. It is most unfair that someone can agree to buy a property and can withdraw, on nothing more than a whim, right up to the day of exchange.

“The Home Information Pack was introduced to make home selling and buying quicker, however well-intended the concept, the practical application needs adjusting. A survey on a property must be acceptable to all lenders, or it is a waste of time and money for the buyer to provide it. Searches in advance of agreeing a sale would be ideal. However, they would be more effective for it to last for longer than the three months agreed on at present.”

 

Nicole Cox, Wye Residential
“The biggest bug-bear for us is the length of time that sales take to go through. Interestingly it is not often the mortgage that is the stumbling block, but the conveyancing itself. Investing in a well-qualified and skilled conveyancers and solicitors should not be underrated. Trusting in the knowledge and experience for the legal teams involved will enable sales to go through quicker, smoother and more efficiently. In doing so, the process will become less expensive for all parties and vastly reduce the stress that is often involved with buying and selling property.

“Gazumping is a nuisance, but does tend to show that the market is buoyant. However, with effective conveyancers and solicitors involved, I believe that this would no longer be an issue as both the buyers and sellers experience a smooth and successful sale.”

 

Alan Howick, Howick & Brooker Partnership
“If every house had a MOT it would make it easier. My view is:

1. Return the Home Improvement Pack

2. Create a checklist for sellers to complete for putting their home on the market including: gas, electric and asbestos checks

3. Encouraging lawyers to work alongside estate agents will help all parties involved get to a smooth and transparent sale

4. Create a checklist for buyers: the buyer should have a proven completed chain and proof of funds in place to prevent sales falling through”

Stefan Collier, Joplings 
“As a selling agent and a surveyor, I regularly see the wasted time, money and emotion from all parties. This is largely down to the fact that the initial decision to purchase is based on very little information and because there is no time limit. The process is all the wrong way round; conveyancing, getting a mortgage and searches take such a long time (10-12 weeks from agreeing a sale until exchange, when 10 years ago the average was 6-8weeks), often causing buyers and sellers to get cold feet.

“To counteract this, the vendor should have a survey, valuation and legal pack before going to market to establish the legal title, searches and any problems with the property. This allows issues to come to light and be fixed before going to market. When the purchaser makes an offer based on all the relevant information, I believe that there should be a financial commitment to purchase and a set timescale to exchange. 

“This will therefore be a way of ensuring that the vendor is committed to selling, as there would be an upfront cost. Additionally, only committed sellers will put their houses on the market, reducing the numbers of pull outs. Purchasers too are less likely to withdraw because they will be more knowledgeable about the property from the offset. The legal pack would speed up the time it takes solicitors to complete the conveyancing process. The financial commitment from the purchaser would further guarantee their commitment to purchase before offering. 

“The above system could save everyone concerned a lot of money. Except maybe solicitors!”

 

Justin Flanagan , Charles Eden
“The Department of Business, Energy & Industrial Strategy’s report on ‘Research on Buying and Selling Homes’ states that, 13 per cent of buyers and one per cent of sellers have experienced Gazumping leading to sales falling through. However, in my experience of gazumping is limited to none.

“If anything, gazundering is more of an issue and whilst this generally does not lead to a fall through, it does cause a lot of stress at a late stage. All transactions are subject to contract so it would be difficult to prevent this behaviour from the buyer. It is also difficult to police as they can always find some sort of reason to justify their action.

“The south of England is arguably experiencing a slowing market. This provides the perfect backdrop to highlight any pitfalls of the Home Information Pack. We found that when sellers collated information and paid for searches on the outset, this information was generally disregarded by potential buyers coming along months down the line for understandably it was seen as out of date. Likewise lenders would take this view.

“Whilst not providing a solution I thought it worth highlighting issues for consideration when discussing matters.”

 

Allan Carr, Pulver Carr
“I believe all fees and charges, especially set by the Government should be more transparent. The Stamp Duty Charges within the M25 are a suitable example of this. If the charge was made clearer or even reduced, it could have the positive effect of encouraging people to move or buy property.

“It is currently very easy for either party, buyer or seller to withdraw from the sale. It may be more efficient to create a ‘lock in’ for both parties. They would pay a non-refundable deposit to be held by their respective solicitors, so that in the event that one party pulls out, the other party will be disappointed and inconvenienced, but they would at least not be out of pocket.

“Finally, solicitors should have the ability and the desire to speed up the conveyancing process which often causes undue delays, especially with leasehold properties.”

 

Simon Davies, Norman F Brown
My three points of interest are:

“In my mind the Home Information Pack had the best of intentions, but didn’t carry enough weight within the industry and were too complicated. As an alternative, agents have the expertise and can work more closely with the solicitors. Agents could collect the protocol documents solicitors usually sort out when a sale has been agreed including, fixtures and fittings and property information questionnaire. We can then send this all off with the memo of sale to the solicitors.

“It is too easy for purchasers and sellers to pull out of a deal. It can genuinely change lives and cause a great deal of heart ache. To combat this, to speed things up I believe that once the survey has been conducted, whoever pulls out should be liable to pay for the fees of the other party (Including part of our fees). This will be hard to police and sometimes it is justified, but it will ensure that only serious buyers and sellers engage with the process.

“Better communication and efficiency between solicitors, conveyancers, buyers, sellers and agents will lead to quicker transactions and fewer withdrawals. I suggest that solicitors invest in interactive websites for buyers, sellers and agents to be kept updated.”

Joseph Down, Debbie Fortune Estates
“My two key points on this are as follows:

“The cost of moving is a huge factor that has caused many to think twice about moving at all, preferring in many cases to extend their existing homes if possible. Stamp duty is still such a significant cost for many, particularly here in the South West, where prices are very strong around the Bristol area meaning many now “average” moves are costing £20K – £30K in stamp duty, agency fees, solicitor fees etc. In my opinion I would encourage the government to look at stamp duty again, for both single property owners and investment. I do appreciate that the changes made over the past few years to stamp duty have brought the cost down for many, and made the system fairer. It is still however a very large cost to factor in, often ending a sellers’ hopes of moving.

“The lack of commitment until exchange is, in my opinion, the biggest problem in the industry. Our current system offers no compensation or security when a sale falls through. To address this, I suggest that the agreement should be more legally binding at offer stage, with some form of redress should either party pull out of the deal. Many other countries around the world offer us an insight into how we can evolve and make our system more efficient and simple – Scotland being one of them.”

 

Philip Jackson, Maguire Jackson
“One of the lead issues is to address the falling numbers of transactions. Today the level of property sales is over 30% down on the same time ten years ago (HMRC Stats England 2016 had 1,057,750 sales, whereas 2006 1,404,710 sales).

“One explanation for this is that increased Stamp Duty makes impulsive moves more considered as do the increasing costs for private lands, which supply a large part of the private rented sector. The HMRC would maintain its revenue if the Stamp Duty levels were reduced because it would be countered by the increased volume from the market.”

 

Chris Sawyer, Sawyer & Co
“Firstly, making the process legally binding earlier will be worthwhile for all parties by increasing trust and confidence both in the process and people involved. I suggest that we give parties the option for a delayed completion or an on or before completion date. There would be financial consequences for buyers and sellers who fail to conclude.

“Secondly, in order to speed up the process we need to get vendors legally ready for a sale. Technology could help with this by collating information online such as, land registry title information, details contained within a local authority search, management information (in the case of leasehold properties) and perhaps even a survey or building report. Together with any other relevant documents about the property, either on a government website or digital platform, this could be used by the buyer, conveyancer and lender.

“This information could also be seen by buyers before any commitment to purchase is made, and in the case of leasehold transactions, managing agents should also be made to provide information within a swift time frame and at a realistic cost.”

 

Simon Miller, Partner at Holroyd Miller
“I probably won’t be popular for saying this but bring back the Home Information Packs. A Home Information Pack is telling the buyer, the solicitor and the lender everything they need to know right at the beginning of the process, which in theory should speed up the process to exchanging contracts.

“Currently the system is too easy for people to walk away. I can appreciate a property may flag up issues later in the buying process which could force a decision to walk away, but the Home Buyers Pack would ensure that didn’t happen. A non-returnable deposit would certainly make people think through their decision with more commitment.

“There is a requirement for a universal survey that the lenders are prepared to accept. Many issues are caused by the valuation survey and often it can come as a nasty surprise. A universal survey conducted independently would solve the problem and provide buyers with clear guidance on how much their bank is prepared to mortgage.

 

Lynda Lewis, Town & Country Mold
“In short, the law should be changed to state that an accepted offer is binding and all vendors should have survey done on their own home enabling a better understanding by the buyer of the financial commitment over and above the cost of the property purchase. The original proposition around the Home Information Pack made sense. It proposed a Property Survey, but sadly a watered down version was introduced. This would go a long way to ensuring serious home Buyers/Sellers only come to market and increase the likelihood of avoiding fall throughs and quickening of the whole process.”

 

Life Magazine – Le Tour de Yorkshire in Ripon by Nicholas Lancaster

Joplings’ chosen theme for Issue 4 of our magazine was 2017 Tour de Yorkshire, to celebrate the fact that the City of Ripon was a hub for the race with family events throughout the city and a ‘Big Screen’ on the market place.

Nicholas Lancaster sent in this amazing photograph of the cyclists as they raced through Ripon and was chosen as the winning image due to the exhausting effort showing on the faces of the riders as they powered up North Street.

Guild Magazine – The Lock Keeper’s Cottage by Paul Hildreth

Joplings asked the people of Ripon for a Spring photograph which could be used on their next Guild magazine front cover.

 

Paul Hildreth from York was one of many people who emailed and kindly provided a selection of Ripon images. We used his seasonal Spring photo of Ripon Canal and its well-known Lock Keeper’s Cottage for the cover of Issue 3 of our magazine.

JOPLINGS’ LANDMARK: Guild status for Joplings Property Consultants

PRESS RELEASE: 5th December 2016

 

Leading property consultancy Joplings is proud to announce that it has been awarded exclusive Membership of the prestigious Guild of Professional Estate Agents for Ripon and Thirsk.

 

The Guild is a nationwide network of approaching 800 leading estate agents, all dedicated to maintaining the very highest standards of professionalism and customer service. Guild Membership is traditionally only granted to one agent in a given area.

This appointment means that Joplings has been judged to have met or exceeded The Guild’s exacting Membership criteria, and in recognition of this achievement has been selected as its sole representative in Ripon and Thirsk.

As part of Guild Membership, Joplings has access to innovative marketing to promote their sellers’ properties to the highest standard. They also have access to the widest possible pool of buyers – not just in Ripon and Thirsk but across the whole of the UK including the lucrative London market, where properties are marketed through The Guild’s head office in Park Lane.

“Being chosen to represent The Guild in Ripon and Thirsk is a great honour,” says Michael Stephenson, General Manager. “The awarding of this membership is a tribute to all the hard work we have invested into building our reputation for exceptional service, and underlines our position as a leading property consultancy in the area.”

Speaking on behalf of The Guild, CEO Marcus Whewell says: “We are delighted to welcome Joplings into The Guild as our new representatives in Ripon and Thirsk. Their expertise and outstanding service mean that they will be an important and valued asset to our national network.”

With all these advantages, Joplings is keen to develop the services it offers its clients. “Our business is all about people,” says Michael Stephenson, “which is why we remain committed to the principles of good old-fashioned, honest, personal service and this has always been our trademark.”

Expert market knowledge and the traditional customer service you expect from a leading local property consultancy, combined with unrivalled nationwide marketing power, means that Joplings and The Guild make a powerful and successful combination.

Please call in to discuss your requirements - our friendly staff are always happy to help

10 North Street, Ripon North Yorkshire, HG4 1JY Telephone: 01765 694800 Fax: 01765 694801 ripon@joplings.com
19 Market Place, Thirsk North Yorkshire YO7 1HD Telephone: 01845 522680 Fax: 01845 526055 thirsk@joplings.com