Owning buy-to-let properties and being a landlord can sometimes mean that you'll encounter some difficult situations with your tenants - this could be due to rent arrears or how the tenants are treating your property.
Equally, there are instances where tenants can encounter difficulties with unscrupulous and rogue landlords - but that's an article for another day.
While no landlord wants to be involved in a dispute with a tenant, it's always a possibility, no matter how unexpected, and can be one of the biggest challenges of running a buy-to-let portfolio.
Some disputes can be extremely time-consuming and also costly if drawn out over long periods of time.
But how can you avoid and prevent tenant disputes?
Good referencing
It's extremely good practice to undertake thorough referencing of a potential tenant to minimise the risks. Invest in a specialist tenant referencing company or complete your own background checks. If your prospective tenant has lived in a rented property before, what does their previous landlord say about them? Also obtain employer references confirming the tenant's start date, position and annual salary, and if necessary, carry out a credit check. This will reduce the risk of encountering issues after the tenant has moved in.
Choose tenants carefully
It's very difficult to select tenants from referencing alone. Try to get to know your prospective tenant during the viewing. This should give you an idea of the type of person that wants to make your house their home and whether they seem like they'll be happy there. It should also make your tenants feel more comfortable. If satisfactory references are returned then trust your judgement. If you feel they will be a good fit for your property then don't be worried about moving forward with them.
Introduce existing tenants and new
As well as meeting your prospective tenants, it's wise to arrange for new tenants to meet any existing tenants if applicable. This is especially true for landlords of HMOs (Houses in Multiple Occupation) or those who own several properties in one street or block for example. This can help to ensure that everybody gets on and reduces the chance of disputes between tenants.
Allow for good communication
Before your tenant moves in, make sure they are aware of any house rules and responsibilities with regards to any maintenance and cleaning. It can also be useful to provide them with details of the local authority for example so they can contact them about council tax and such if bills aren't included. Ensure they have your contact details, or those of any management company, so that they know who to contact if there is a problem. A welcome present can also be a nice touch and build a good rapport.
If you have taken all the necessary precautions and still encounter tenant disputes, what is the best course of action?
Know the law
Disputes are easier to avoid than solve and most problems arise when one party is unaware that they have broken the terms of their tenancy agreement, or are unaware of their rights for example. Take the time to learn the law and make sure you are operating within it. Stay up to date on landlord legislation and provide your tenants with this information too.
Talk and meet face-to-face
Most problems with tenants can be solved if the issue is discussed, and working it out between the two parties is more cost effective and easier in the long-term. If both parties have only traded angry words over the phone or by email, a face-to-face meeting in neutral territory may help and make both parties feel relaxed.
Document everything
Having a paper trail is imperative and your best defence in a dispute. If a tenant has repeatedly broken the rules of a tenancy or lease agreement, or has made unreasonable demands, documentation can help build and prove your case.
Court action
Many cases can be resolved before they reach court, once lawyers are involved. If this is not the case, most disputes arising from rental property fall under the jurisdiction of small claims court. Small claims court is usually less expensive than going to civil or criminal court, and may lead to a quicker resolution.
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Always remember that it is in your best interest to make sure your tenant is happy. In most cases, disputes arise from misunderstanding or circumstances outside of your control or that of your tenant. So due diligence and ongoing communication is key, as is being as reasonable as you can when a dispute occurs.
