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Sun, sea… and problem tenants

Eastbourne imageIf you visit the resort of Eastbourne on an off-season weekday it’s easy to see why the town has a reputation for gentility.

Traffic is light, the grass verge is well kept, signboards for the musicals playing at its theatres stand sentinel at roundabouts and a sprinkling of shoppers wander around its cavernous Arndale Centre. It’s an image the local council is working hard to change. It recently launched a national competition to design ‘modern’ beach huts for its salty, wind battered seafront and the Arndale is getting an £84m facelift.

How far do you let someone go, believe their stories, then show compassion and remember when you were young and rubbish with money? Serena Burt, Landlord.

Serena Burt, Landlord, imageBut what few people realise is that Eastbourne has an accommodation problem. A legacy of government policies during the 1980s to offload urban job seekers into the south coast’s resorts, and the town’s low-paid tourism industry, mean its central districts have a sizeable number landlords offering Houses in Multiple Occupation (HMO). These are aimed squarely at the town’s transient population, who are often enduring both financial and personal difficulties.

Renting out properties for over a decade in this sector is Serena Burt, who with the help of her lettings agent husband runs several HMO and ‘normal’ properties in the town. But unlike some landlords in this sector, she takes a hands-on and socially responsible approach to managing her tenants.

Her working life is certainly not dull. The day-to-day challenges of managing a small army of tenants whose lives are often shambolic mean Serena is at the extreme end of ‘problem tenant’ management. So we asked her to reveal some of her experiences.

SUBLETTING

Serena says sub-letting is a frequent problem for landlords in the area, but one she deals with head on.

HMOs image

HMOs aimed at a transient population.

“What do you do if you discover an unknown person in the house?” she says. “You can’t serve notice if the tenant has abandoned the property and I don’t believe you can claim they’re squatting if the subletting tenant has keys.

“Therefore, the simplest resolution is to assume the tenant has abandoned the property, follow procedure and change the locks leaving a clear message detailing the landlord or agent contact details for re-entry.

“If the tenant is still in residence, it’s a Section 21 notice or a quiet word in their ear to get their guest out immediately – often I have to track the down to their favourite pub to get it all sorted out, or not.

“For example, I once visited to a property to inspect it and collect unpaid rent and was confronted with a man in his Y-fronts saying he’d met a bloke in a pub who gave him the keys and said he could stay there,” she says.

“Within an hour the room was cleared, the subletting tenant left with a flea in his ear and it was deemed the original tenant has surrendered his tenancy voluntarily by handing over the keys in the pub.”

UNPAID RENT

Some of the many challenges that may (may, note, not will) come with this sector of the lettings market, is risk – risk of damage to property, of unpaid rent, of the difficulties of evicting non-paying tenants. Many landlords take out insurances against these issues, which are easy to arrange and provide a good degree of cover, but others prefer to manage the risk.

Serena says her biggest challenge as a socially responsible landlord is to differentiate between the most honest tenants who need some breathing space and the ones who are taking advantage of her.

“How far do you let someone go and how much do you believe the stories, show compassion and remember what it was like when you were young and rubbish with money?”

There are plenty of reasons a tenant, particularly vulnerable ones in an HMO, may not be able to pay their rent. These include losing their job, a cut in wages, or because a partner has left them and they can’t afford to pay the rent by themselves.

Some of the more colourful excuses Serena has dealt with include ‘I forgot it’s Christmas’; ‘I had to buy a new games console as I get bored’ and ‘my mate owes me money.’ But Serena says she “won’t take money from someone if they don’t have enough to eat or get the bus to work.”

“It’s as important to me that they are able to earn money as it is to them so we come up with a payment plan to clear the arrears over the next month. This is why if you’re being paid the rent in cash, it’s so important to have a receipt book where you can write everything down.

“It is possible to make and be compassionate when dealing with HMO tenants – the two are not mutually exclusive.”

ILLEGAL ACTIVITY

Lettings agents will be used to serving a Section 8 Notice to Quit when tenants are discovered dealing drugs or handling stolen good within the property (and therefore breaching the terms of their contract) and it’s a scenario Serena is also familiar with, sometimes in extremis.

“One set of tenants told me recently that one night two men with guns arrived at their front door who then marched all of them into the top bedsit,” says Serena. “This included one of the tenants – let’s call him Joe – whose bedsit it was, in which there were drugs, cash, and computers, some of which the two men with guns clearly felt they had a claim to.

“The two gunmen then robbed everyone in the house of any valuables and made their escape, but the next morning at 7am the other tenants removed Joe from the property and told him he had a two-hour head start before they called the police.”

Illegal activity tenants image

One 50-year-old tenant asked if she could store her full-size wooden cross, which she used for her ‘hobby.’

But sometimes Serena’s tenants are less obviously involved in ‘illegal activity’. One example would be the 50-year-old woman who recently asked her if it was acceptable to store a full-size wooden cross in her room.

It then transpired that the item was for her ‘hobby’, which she said was running a fetish club, but that she claimed was unpaid work and not taking place in her accommodation.

Serena later found out the lady was charging £100 a time for her services, which still wouldn’t be grounds for an eviction unless she could prove her activity was ‘keeping a brothel’, but clearly surprised even this experienced landlady.

“One upside to this landlord business is how it puts you in touch with people you’d probably never encounter,” she says. “I’ve met tenants with a variety of hobbies from body building and fishing to alcohol and drug abuse and a bit blackmailing on the side. But never, ever, had I come across Linda’s hobby in either a social or professional capacity!”

CHANGES TO HMO LICENSING

Properties like Serena’s are defined as HMOs because they are buildings or flats where the basic facilities are shared – such as a kitchen, bathroom or toilet, by people who do not live together.

These ‘large HMOs’ are covered by mandatory licencing if the property has three or more storeys occupied by five or more people who do not form a single household. Mandatory licensing means the landlord or letting agent has additional responsibilities compared to a ‘standard’ rental. These include that the electrics are checked every five years, is not overcrowded and that fire safety measures are in place.

But the government is now asking the industry whether it should extend these responsibilities to landlords who rent out two, and possibly even one-storey properties. Also, it wants to know if five people making up no more than two households should remain the threshold for the HMO definition too.

The consultation, which began in November 2015, appears to still be underway but in many areas government guidance to councils is already trickling through.

For example, in Brighton, where Serena Burt’s husband works as a letting agent, things are already changing.

“It is now almost impossible for three or more friends who have different surnames (and so do not form a “household”) to find even a simple flat share,” says Serena.

“Often two people going out with each other plus a friend are being turned away in case the council decide the property has become an HMO and impose extra regulations on the landlord.

“It’s becoming an enormous issue and forcing people into rooms in shared houses with strangers when they just wanted to live with their friends.”

Read more about Serena’s life as a landlord at: www.hmolandlady.wordpress.com

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