A worried landlord forwarded me a news article last week about this recently happening to a man in Luton. He had returned home to find it stripped of all his possessions, having been sold without his knowledge. Unfortunately, this is not an isolated incident, with the Land Registry paying out £3.5m in compensation due to fraudulent transactions last year.
The fraud occurs with the criminal impersonating the owner of a property so they can then sell or mortgage it. Buy-to-let properties without a mortgage are the perfect storm here, as the owner won’t live at the property and there isn’t a mortgage company double-checking things or receiving any of the sale proceeds.
As title deeds are a publicly available document (they cost £3 to download online), it is very easy for anyone to get the name of the owner of a property. The title deed will also show whether there is a ‘charge’ against the property i.e. a mortgage. With this information the fraudster, who often first poses as a tenant, will simply change their name by deed poll to match the property owner’s name. Now living at the property with the same name as the true owner, it becomes very easy to build up identification documents and paperwork that would see that person passed off as the ‘owner’.
That’s exactly what happened with the property in Luton, with the fraudulent tenant selling the property without the landlord even knowing! Another case saw a previously unencumbered property in London become subject to a £1.2million bridging loan, which was paid out to a mother and daughter who had changed their name to match the registered owners.
Fortunately, there is a solution to this; which is to enter a restriction on your title deed. This will then state that any application to change the register must be accompanied by a solicitor’s certificate verifying your identity as that of the legal owner. This can cause a slight delay when you actually want to sell or mortgage your own property, but that’s surely better than falling victim to this crime.
Another option is to sign up to the Land Registry’s free property monitoring service. You’ll receive an email if an application is made to change the register; so, whilst it won’t prevent changes being made, at least you’ll know straight away so you can take prompt action.
As ever, prevention is better than cure. So, whilst the above is rare, it pays to be aware of such matters so you can put measures in place to ensure you are protected. Thorough tenant referencing will also put off any chancers with such misdeeds in mind, as they will seek an easier target if asked too many questions.
Most tenants simply want to live in peace in a home that they can treat as their own, whilst happily paying the going rate to do so. A very small percentage, however, will set out to either mistreat the property or purposely not pay the rent. Here are five tips to avoid these so-called ‘nightmare tenants’:
1. Offer tenants a nice home
If you offer a neglected property in poor condition, you are likely to attract less interest and will have to settle for tenants who are perhaps unable to secure a ‘nicer’ home. Meanwhile, if the property is well-presented, it will attract a wider pool of tenants to choose from and they will most likely take pride in keeping it in good condition.
This applies to ongoing maintenance issues too; afterall, if you don’t care about the property, why should your tenants? Furthermore, tenants will feel aggrieved paying full rent for a property that isn’t fully-functional or being maintained as it should be.
2. Match the property to the right tenants
It’s hard to say no sometimes, but a property needs to suit its occupants. For example, most blocks of flats won’t accept pets as it is part of the head lease. This isn’t unreasonable if you think about trying to live with a dog in a small second-floor flat with no access to outside space and with neighbours on all sides of you. It might also be unwise to allow two adults and three children to rent a two-bedroom flat; they simply need more space and amenities than that to live comfortably and to be able to keep the property in good order.
3. Reference thoroughly
This is probably the most critical step in ensuring you avoid ‘nightmare tenants’. Helpfully, referencing is something that prospective tenants with something to hide will try to avoid. Do not take shortcuts because a tenant wants to let the property quickly, can offer monies upfront or because a ‘friend of a friend’ says they’re “good for the rent”. Genuine tenants won’t quibble about you undertaking credit checks and asking for documentation, such as payslips and bank statements, so as to give you a full picture of their financial standing and rental history.
Furthermore, (and similar to point 2) you aren’t doing someone any favours in allowing them to commit to a rental property that is simply too expensive for them in the first place.
4. Ensure all the paperwork is in place
Tenancy agreements should contain clauses relating to sub-letting, noise, pets and other common do’s and don’ts, which will help avoid conflicts later on (and can become grounds for eviction if they are ignored). A detailed inventory, including photos, not only serves as a record if there is a dispute over the deposit at the end of the tenancy, but acts as a deterrent in the first place (as the recording is so detailed) and a guide for tenants at the end of tenancy (so they can check how the property should be left so as to receive their deposit back).
Ensuring all the paperwork is completed and provided to the tenants in the correct manner will also avoid problems later on. For example, if not served correctly, you open yourself up to fines, compensation claims and difficulty in progressing eviction notices if necessary; all of which a ‘nightmare tenant’ could use against you.
5. Keep in touch
Maintaining an open dialogue with tenants and responding to tenancy-related and maintenance queries promptly will encourage a good relationship. Visiting the property regularly will allow you to spot problems early, as well as checking all is ok with the tenants so as to maintain and prolong their tenancy. It also shows you are pro-active and haven’t just ‘left them to it’; tenants are more likely to take liberties with absent landlords.
There are many other ways to minimise the risk of letting your property to problematic tenants, some of which are quite subtle and come via experience. Ultimately there is no fool proof way to avoid a ‘nightmare tenant’, although these five tips will go a long way to avoid those who seek to enter a tenancy agreement with bad intentions from the outset.
