Hi Jay,
Well, first of all, don’t lose heart. You can get through this and although it might take a while and might cost you, if you take it one step at a time, all will be right with the world again.
Firstly, you should look to serve a Section 13 notice to raise the rent. You can raise it right up to market value but in the circumstances, just to cover your cost is prob the wisest course of action. The tenant can ignore the S13, but if they do, they are in effect accepting it. The only way they can object is by responding to the notice offically by asking for a rental tribunal to respond. If your rent increase is fair, it’s unlikely that it will be denied by the rent tribunal so they’ll be forced to pay the increase from that point on. Of course, they may fail to pay you any of the rent increase, but that will not help their cause when all this goes to court.
Secondly, you need to deal with the deposit. I assume from your post that it is no longer protected. If so, you now risk the T taking you to court with a no-win-no-fee lawyer for non-protection of the deposit. They’re likely to get the majority of the highest possible award of 3 x deposit if they do because you have been negligent for a very long time. Hopefully, it’s only one tenancy i.e. since you got the deposit, they’ve been on a periodic tenancy. Otherwise, they can claim the 3 x for each tenancy they’ve signed.
If you want to serve a valid S21, you need to immediately protect the deposit. That will give you the paperwork you need to pass on to them. Do this along with the current GSC and EPC as well as the most recent edition of the How to Rent booklet from the govt. Get them to sign and date a document that says that they have received each of these pieces of paper. Then you should be in a position to serve the S21 notice. I suggest you check Shelter’s S21 validity checker and read up on your LL’s responsibilities in regard to the all this so that you know in detail all you have to do.
Once the S21 expires it’s unlikely the tenant will leave so prepare for that by getting yourself a solicitor who is experienced in tenancy law to start eviction proceedings. In fact, you might want to talk to a solicitor now because considering you’ll almost def need one later, you might as well get them involved now to make sure you do everything right.
This will cost you and will take time, but if the tenant is serious about being made homeless, they are likely to take that as far as they can go which means that once the court decides in your favour, you can get baillifs in to evict them and get your property back. Be prepared for it to need a fair bit of work and more expense to get it back on the market.
The alternative to this is to agree minimal rent rises annually in return for the tenant staying long term. That might cost you, but you’d need to weigh that cost up against the cost of doing all the above and factor in the stress you’ll be put under. Whatever you do, protect that deposit anyway.
And if you ever let property again BMV then make sure you issue S13 notices each year in order to at least keep your head above water.