I’m unable to agree a new rent with one of my tenants. She is asking me to ‘give her notice’ confident that she will be able to get help with housing from the council, but she is a single Mum with 4 young kids, and I’m feeling reluctant to give notice to evict, as if she doesn’t get their help, my only option to resolve would be be evict through the courts using the Section 21 rules.
Whats are your thoughts? I could issue a Form 4 to try and force a higher rent, but I know finances are tight, and we have spoken about it, she has checked, worked it out & says she can’t afford anymore. Albeit there is a guarantor.
I could leave the rent as it is, but its around £200pm less that I could get if I put it back onto the market. Whilst I’m happy to accept less based upon their 7 yr loyal tenancy, my rental portfolio is my main income, so I should be looking to maximise income… but I’m not heartless, so am unsure what to do.
Whilst I’ve been a landlord for 20+ years, and now own a number of properties, I’ve been lucky, not been in this situation before, and never had to evict anyone.
Any advice or pitfalls I should be careful to avoid?
I think the main pitfall would be to raise rent and believe the guarantor automatically becomes responsible for the increase. This could cause the guarantor agreement to become void depending on what it says.
I would raise rent by giving notice and hope it sticks. Either to the full rent or just shy of it. If she can pay, she can. If not, then evict. As you have a guarantor you’d be fairly sure to get money and eviction costs if you have to evict.
She’s possibly trying to use you to giving notice so she can secure a council property.
A good tenant at a lower rent is better than a bad tenant at a higher rent, in my opinion .I have a few tenants longstanding at a lower rent who are no problem to me and have been there years. If you increase the rent and she cannt pay then you evict , she cannot get another place and stays , maybe even stops paying. ? Last thing , do nt be a landlord who squeezes till the eye balls bulge
If she’s had £200 below market rent per year then I think it’s time to put rents up (£15k over 7 years!). A £25 or £50 lower rent than market is ok for long-standing, good tenants but more than that is not ideal.
Have you done a quick calculation to look at the cost of eviction, potential void, refurb and new tenant fees, How many months of £200 extra will it take to recoup. Factor in you tax position. A single mum with kids may have to let you fully evict to get support from council. So make sure you can fully justify £200 and will not have to reduce to get new tenant quickly.
You need to be careful about this as landlords have been prosecuted in the past for colluding with tenants to fraudulently gain social housing. If you were planning to either raise the rent or evict her anyway then OK, but if you’re doing it in response to her request, you are leaving yourself vulnerable to legal action by the Council.
I could advertise my place for 20% more than I am currently getting, and that has been like that for three years now. I do not have a good tenant, who is in arrears, but is ‘trying’ in all senses.
Good advice is to evict, but is it worth the risk and costs for me? Not yet. I am renting my home while trapped in another country, to put my situation into context.
As Karl11 is a portfolio landlord, with a heart, then I suggest Karl let her be, as your portfolio is like a share portfolio - some do well, others not so well, but in the long run you don’t lose out.
Sooner or later she will either earn more, so a future rent increase request may then be accepted, otherwise inflation in due course will mean they can’t afford to stay, and they will look elsewhere and leave. At worst you lose a little each month, and one day you decide to evict, with its attendant financial and stress risks.
If you have a big heart, you could see if she can get more help from the Council or charities.
At the end of the day, do you want to be a money grabbing landlord, or a person who tries to strike a compromise between caring and being business like?
Good luck in whatever you decide.