The Property Unleashed Podcast

How To Handle Rent Arrears From First Missed Payment To Possession

• Mark Fitzgerald • Episode 365

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Welcome And Topic Framing

SPEAKER_02

So great today to have Alison and Anthony on from Homemaker Properties, a resident lettings expert, among other things. They do source deals and they work with investors as well. But it's great to have you both on. How are you both?

SPEAKER_01

Thank you very much. The sun's shining. So we've had to pull the blinds across so we've not got stripes, stripey light stripes down our faces. So yes. Nice to have that problem.

SPEAKER_02

Definitely. Definitely. So we're going to be talking about a topic today that a lot of landlords hate and dread and fear, which is rent arrears. What to do about rent arrears, how to get around rent arrears, and basically the whole sort of infrastructure on that. So I shall leave it to you guys.

Why Arrears Happen And Scale

SPEAKER_01

Yes. Not the sort of things that landlords like, but unfortunately, there's all the good bits. We like the good bits of being a landlord because you know there's lots and lots of positives, rent, you know, positives of all the things that are happening, but unfortunately the rent arrears happen. So Alison, it's over to you, going through different things now, stats, processes, legal processes, and then we're going to come to me at the end for court. The scary bit.

SPEAKER_00

Yeah. So unfortunately, rent arrears, if you're a landlord and you're in the game long enough, you're probably going to come across at some point a tenant that will stop paying you or that falls into arrears. So yeah, today we wanted to kind of give you kind of a bit of an insight into about our process and what kind of steps we take when a tenant falls into arrears. But here's a stat for you:£470 million worth of arrears were recorded in England in 2024, 2025. So that financial year. So 470 million. That was like 800 and something million during COVID.

SPEAKER_01

So better than when we were. Landlords are loaded, so that's okay. All these landlords have got lots of money, apparently. But not a fact.

Affordability Criteria And Referencing

SPEAKER_00

So big, big numbers. An estimated 210,000 rental households venture is in that period. So big numbers. So the chances are at some point you probably will experience it. So our process starts right from the beginning when we've through the application stage. So we're setting that affordability criteria. So you can set whatever affordability criteria you want. I think the standard and what we follow is that the tenant needs to be earning two and a half times the annual rent. So in terms of their earnings or their income, it can come from any kind of source. It can be benefits, it can be their job, it can be student finance, but they have to meet that affordability criteria. If not, they need to have a guarantor, which also needs to meet with the affordability criteria. But then they need to go through all the credit and referencing checks. So if there's any CCJs or any adverse credit that will show up in our pro in our um referencing, that would automatically mean that they fail referencing if they have got a CCJ. My recommendation to landlords, I mean, it's ultimately the landlord's decision if they want to take that risk. I personally, where we're going and where everything's heading with the Renters' Rights Act, I would not be taking any risks.

SPEAKER_01

So I know some tenants may well come along and say, Oh, I'll pay you a rent up front. Okay, brilliant. That's wonderful. Okay, you're gonna pay six months' rent up front. Not that you can do that now as well, the new renters' act that's coming, but you know, you can drip feed it to yourself each and every month, all these different things. No, because uh before the changes were coming in, it was a case of, well, what's gonna happen after six months? All of a sudden you don't plan, we've got to go through a whole load of things, as we'll come on to later, the chasing of things. So assurance in place now and security of tenancies is gonna be very, very important.

SPEAKER_00

Yeah, definitely. So then once you're setting up that tenancy, it sounds really obvious, but making sure that that term is is clear. So what amount they're paying, how often they're paying, the date that they need to pay, make sure it's all in that contract. And also how do they pay? The amount of landlords and the amount of um tenancies I see, and that there's no instructions on how the tenant needs to pay.

SPEAKER_01

Well, but you shouldn't take it from a bank account.

SPEAKER_00

What the bank direct details are on.

SPEAKER_01

No, you should go to your bank, set it up yourself. We've all got apps now on our phones. Oh no, I have to go to the bank.

Tenancy Setup And Clear Payment Terms

SPEAKER_00

Yeah, but it's just I think just making sure as well that it it is clear to the tenant, because sometimes tenants do think that you're automatically going to somehow magically take that money from their bank. So just making sure they're clear that they need to set up a stand in order or they need to do the bank transfer, preferably stand in order, but not all tenants do that. And then if they fit fall into arrears, I think communication is so key. You want them to talk to you. The worst tenants to get into arrears is when they don't talk to you and when they don't come to you and say, I've got a problem, you know, partly embarrassment, partly they just don't know what to do. But trying to keep that kind of conversation going is really important. So going in like really hard and firm isn't always the best approach. So we kind of usually start with a, you know, oh, you didn't pay your rent. Like, is there a problem? Is there something we can help with? Like just trying to have that chat with them. So we will send out email and text message reminders from our system the first day that it's it's outstanding. And they're kind of gentle reminders like, oh, we don't seem to have appeared to have received it, please make the payment. We will then follow it up with a call if it doesn't come in. But a stat that we had in a sales call earlier this week 28% of 18 to 34-year-olds never answer the phone. So I would say for that percentage message me.

SPEAKER_01

What's that mean?

SPEAKER_02

Slip into my DMs.

SPEAKER_01

No, I'm not fancy speaking today.

Early-Stage Arrears Communication

SPEAKER_00

So I'd say that percentage would probably significantly go up if they know that there's money outstanding or they're just being chased for payments. So more and more I'm finding that those calls don't answer you're talking to someone's voicemail. So it is really tricky. So, you know, all kinds of lines of communication, emails, text messages, kind of got to move with the times. I wouldn't start going like stalking them on Facebook or Instagram or stuff like that. I think you kind of perhaps overstep in there. It's a bit of a, you know, you don't want to be classed as harassing the tenant, which is another thing. So I'd say most of the time when tenants fall into arrears, it is kind of resolved within a few days. You know, those those initial reminders, those initial calls, most of the time tenants get themselves sorted and pay. If they get to day seven and they haven't paid, that's when the kind of official letters that are a bit more firm must start. So on our system, we will program it that once that seven-day letter goes out, then every week another letter will follow it. So it's it's continually being chased up. We will also keep sending those text message reminders, still trying to make contact on the phone.

SPEAKER_01

What's also important to emphasise or to highlight here now, when would it be that you're going to then be contacting the guarantor?

SPEAKER_00

So our on our system, the guarantor will be receiving all of these notifications as well. So if the tenant has a guarantor, they will instantly be receiving it. Sometimes they'll get in contact before the tenant, but we'll also we'll try and speak to the tenant first. But if they're not responsive, then that's when we start talking to the guarantor.

SPEAKER_01

With regards to our sneaky tactic, which you should all have as well, if they haven't got a guarantor, they were all passed through credit checks, no problems at all, but they've got an emergency point of contact. At what point are we going to go to that emergency point of contact with concerns over we can't get hold of them? We don't know where they've gone. Otherwise, you're calling them, oh, he's got some rent arrears at the moment.

SPEAKER_00

Yeah, you have to be careful what you share with them. But yeah, we kind of have that kind of backup option as well. But yeah, kind of like that seven-day mark, that's probably what we'd we'd when we'd start trying to kind of go down other routes. But they'd get the letters and we'd be arranging an emergency property visit. So we can't just turn up. If you start turning up at the property without giving them notice, unfortunately, it could be classed as harassment. So we'd write to them saying, you know, we haven't heard from you, you're not responding, your arrears are outstanding, we are concerned for your welfare. So we are arranging a property visit, we will be there and give them 24 hours notice. Two of us would usually attend to do something like that.

SPEAKER_01

This is very important. And also when you're there at the property, getting photos and dates, because as we'll come on to later, proof you've done what you've done with everything is so critical. And sending pictures back to the office or the the group WhatsApp messaging that we've got a team, we've got our you know, group WhatsApp for the screen is all at the office. We've got a group of us there. So photos and dates now photos of doing everything that you've done, and it's there, it's record recorded, it's registered. Forget about it unless you need it later. As I'll come on to later, all those things you'll need are important. Prove you've done what you've done, very important.

SPEAKER_00

I think sometimes as well, when you speak to somebody face to face, I think there's this fear sometimes of communicating over the phone. And I think when you kind of sit down with somebody and discuss it, you might get the tenant to open up about what the problem is. The emergency property visit tends to do you either get a response saying, No, you can't come, I don't want you to come around, which then you're there talking to you, so you can kind of talk to them. You'll go and visit and they will make sure they're out, or you might find that the property's been abandoned. That sometimes happens, or they're there and you kind of find maybe there's an issue, maybe they're there's something they're signed off work because of their health, or they haven't been paid, or their their wages are late. Either way, you kind of get to know what the what the reason is. But the idea being you need to try and set up a payment plan. So offer to set up a payment plan, try and get them to suggest the amount that they want to pay. If you start kind of putting figures in there, then you know you kind of may be setting them up to fail. So most will perhaps set set a payment plan. Sometimes you kind of look at it and you think that's not realistic, probably from what they're earning, they're not going to be able to pay that. You kind of say, You sure that's what you can afford? Yes, yes, get it all documented. Because then when you come to court, as Anthony will come on to, that's something that you've done, you've tried to meet them halfway, you've offered a payment plan and see what happens. Sometimes they stick to that payment plan and they'll get out of arrears. Does happen. But in terms of, you know, if all of that doesn't work and you have to go down the legal route, from the 1st of May, the possession grounds are there's a mandatory ground for rent arrears. So they have to have three months of rent arrears before you can serve the notice, and then it's four weeks' notice.

SPEAKER_01

What that used to be, just so it's important to chat and emphasize the channel.

SPEAKER_00

It used to be two months of arrears and then two weeks' notice. So we're adding an extra month onto the amount of arrears, and then we're also adding another couple of weeks onto that notice period. So by the time you're in a position to apply to court, potentially that tenant is in four months of arrears, which is why that communication and trying to sort it out before getting to this point is kind of really important that you try everything.

SPEAKER_01

I really don't understand why they've done that.

SPEAKER_02

There's no benefit to anybody that it's no benefit to the laughter. There's certainly no benefit to the tenant because they're in further arrears, aren't they?

Welfare Visits And Evidence Gathering

SPEAKER_00

I just, I just I can see other changes they've done, taking out these, you know, as we'll come on to the no fault of eviction, but and I think I think it's really important that you know this process so that you can have that conversation with your tenant and say, you know, that situation is gonna get worse. You will have to pay back this money, I will go for a CCJ, the court costs will be passed on to you. So have that conversation, try and make them, you know, if you can willingly get them to surrender their tenancy, that's probably another way. I wouldn't, I mean, contracts won't come into it because there'll be two months' notice, but I would let a tenant go, even if they need without that notice period.

SPEAKER_01

You've got the power if you uh if you have possession of your property, if you've not got possession of your property, you have no power and you can't force evict anybody. But that's what's very important. Alison was just pointing out there the them you know stepping back and saying, Yes, I will surrender my tenancy, but it's very important back everything up, get them to sign something to say that they've willingly left the property, and the reason being is because they cannot afford their rent. And what any terms and conditions of this particular agreement, write it down, all parties sign it, you've covered your back.

SPEAKER_02

Nice.

SPEAKER_00

And the thing with that mandatory ground, so the three months rent arrears have to be at the time you serve the notice, but they also have to be at that point at the time of the possession hearing as well, to meet with that mandatory ground. So if you've got a tenant that's paying bits every now and again, they may pay just below, so they're just below that three months of arrears, which in that case, when you get to court, you won't be meeting with that mandatory ground. So I would always follow up with the discretionary grounds, which are discretionary ground 10 and discretionary ground 11. So number 10 is for any rent arrears amount. So even if it's a very small amount, you can go forward on that. And 11 is persistently late paying. So if you know it's if they've missed lots of payments, if they're before they started missing the payments, they're always paying late, you can go move that ground. And you know, other grounds that there, you know, where they've breached any kind of term in their agreement, include everything you can so that your case is a lot stronger when you get to court. But then, yeah, so once you've done it, once you've served that notice, the next thing is court application. So I'll hand over to Ansi because that's his job.

SPEAKER_01

Yeah, what will be important to emphasize here at the moment, we do still have the trouble, the section 21, no fault eviction. And that is still applicable if you do that application on the last day of April. You are still able to make those applications. So, as is always the way, as long as you've done everything right at the start, the accelerated sorry, accelerated possession, the section 21 is no fault eviction. So you're basically just giving the tenant two months to vacate the property. So that you can only do that when they're out of their fixed term. But once you've issued that notice, that you're then saying, I want you to vacate in two months' time. Section 21's last for six months. So if you're then trying to then gain possession of the property, you can go something called the accelerated possession claim, where you provide everything to the court saying, right, I've done everything right, I've issued the notice at this point. Can you please give me a possession order? So you can still do that until the end of April. However, we're now 1st of May, section 21's gone. No false predictions are gone. So we're now at a point at which, right, I need to get possession back of my property. We've issuing the section eight notice, which is what Alison's referred to, and the tenant has got breaches. Let's say typically it's going to be rent arrears, and they're going to be now at this point three months of array.

SPEAKER_00

Well, when you're doing the court crazy, it's four months.

SPEAKER_02

Four, isn't it?

SPEAKER_00

Yeah, because you're giving them the four.

SPEAKER_01

Oh, right.

SPEAKER_00

That's why we need rent guarantee insurance.

SPEAKER_01

Well, we'll come on to that. Yeah. Right. So we're now at a point at which we're going to say, right, we need to now make a claim for possession. There is a website which is possessionclaim.gov.uk forward slash PCO L forward slash. So possession claim online. So you will then have to set yourself up as a landlord on there. Now, if you're doing it as an agent, you have to set up as though you are the landlord making the claim on their behalf as such, but you'll need to obviously get their agreements with everything you're doing as part of this claim for ourselves. But I've set up multiple over the past gosh 15, 20 years of different people that were the landlords. It's their landlord account because it's the landlord making the claim, not you, to get back possession of their property. So what you need to do there is obviously all the key information about the property that you're making a claim for, and the landlord's address, the claimant's address, their conduct information. It will then ask you to then go through the actual rental statement to which when they started to become in arrears. And each and every month you're making a claim for the rent that was due, what was paid, the accumulated rent arrears. You go through all of these different things. Then you can come to the end of the claim and you're then going to have to make a payment. The payment is£404 to the courts. At this point, you don't need to provide any documentation, it's just a case of the details of the claim that you're making and any actual, you know, common communication that you've had as far as trying to get back possession of this property and get the tenants to resolve matters. And what tenant what terms they're in breach of on their tenancy agreement and what claims you're making as far as the section eight notice and when the notice was issued, all these different things as far as the claim is concerned. You then complete that claim, you then wait for a period of time to get a date for a hearing. Now, that hearing itself will then be you'll need to have the landlord there. I'll come on to raising which you don't have to have the landlord there, but officially, if you are a landlord, you haven't got rent guarantee insurance, you've got to be there for that hearing.

SPEAKER_00

You don't have to have legal representation, you can represent yourself as the landlord.

SPEAKER_01

So we turn up at the court, which is likely to be six weeks, maybe eight weeks after you've made the claim online on the website.

SPEAKER_00

That varies up and down. That's in our area.

SPEAKER_01

Yeah.

SPEAKER_00

Could be more, could be less. Who knows? I think with the loss of section 21, a lot of landlords are probably using that as a route at the moment.

SPEAKER_01

More court claims.

SPEAKER_00

There'll be more court claims, and I think those times are going to go up even so.

New Mandatory Grounds And Notice Periods

SPEAKER_01

So we arrive at court. If um the tenant turns up, they get something called free legal representation. So you've got a gentleman there that will be from a legal firm that will sit down with them and will go through everything and nitpick everything. Now, prior to going to court, you need to have provided to them all the proofs that you did the checks at the start of the tenancy correctly, their right to rent, as far as the insurance for the deposit was done correctly, there was a tenancy agreement in place, as far as then any chasing for arrears that you've done, anything and everything as far as that the tenancy was done correctly at the start, the deposit was insured correctly, as far as then any communication you've had with the tenant. So, for example, arrears chasing, if you've set up a payment plan, what you've done to try and resolve matters. So basically, you've got to create a full case that you have done everything correctly from the start. There's been no harassment, you've made communication, you've tried to resolve matters. So you've done everything you possibly can do by the book. You've got to provide all that proof documented to the courts prior to the court hearing. So basically, you've got a big pack full of lots and lots of paperwork that proves you've done everything correctly. Which you'd have done if you've done an accelerated possession claim in section 21, you'd have provided that to the court, they'd have done it automatically without a hearing. Whereas section eight, you have to provide all that documentation so that the magistrate or the judge has that documentation before the hearing. So, what will then happen is it may well be that the legal representation for the tenant may all come into you and ask for certain other documentation from you as a landlord as well as us as a letting agency that will be there for them. Because they'll try and nitpick. Because when you go into that hearing in front of the magistrate, they may well claim this, they may well claim that.

SPEAKER_00

Their job is essentially to buy time for that tenant. Yes.

SPEAKER_01

Or buy more time, so if everything's been done correctly, you'll sat there in front of the magistrate, and they will say, Right, okay, I've got this, I've got this, I've got this, I've got this. Right. Do you have anything you wish to expand upon as far as the tenant is concerned? And the tenant may well say, So, for example, I had a court hearing, gosh.

SPEAKER_00

It's probably this time last year.

Surrendering Tenancy Safely

SPEAKER_01

Yeah, we don't have very many now, which is great. Where the tenant said, Well, I didn't receive my such and such a notice. I didn't receive it, it was a section eight notice. I didn't receive my section eight notice. Okay. Right. However, we've delivered it by hand. This is where your photo proof is critical, but we also send it by email as well. So an email address that we've received emails from them in the past. In addition to that, they will have received multiple emails from our client account software that gives them reminders of what they owe and when they owe. So we've got all of these proofs that you provided to the court before the hearing, providing all these proofs of all the arrears that they're in, any communications that have been had. Okay, you may well not have received this specific notice. However, you received our letter from the courts for the hearing stating the reason why we were having this hearing. So on that, you had sufficient time to resolve matters. So the judge kind of almost kicked that one for six, which was great. We were sat there, we were very pleased, and then he then says, Oh, you know, well, I I I I'm gonna claim that you know I'm coming on hardship times and all these different things. Well, you've had sufficient time to try and resolve things and to give back possession or to do a number of different things. You haven't. And my understanding is from your wish to do a payment plan here, you'd said you just started a new job and you were earning such and such amount of money. So I again I find that hard to believe in the fact of that you've told me one thing and you're contradicting that with another thing. Possession order granted. It was wonderful. So that Lana was obviously very, very happy. Other times there's been occasions where they said they didn't receive a such and such a document. For example, the how to rent guide or the my deposits information. Whereas You've also got another document that they sign that says they've received all this documentation. So again, you prove everything that you've done, you've got a documented proof, signed proof, all of these different things, you've got it there. And this is why it's so, so, so important. Going the nth degree at the start, doing everything right at the start means that if you have to go through this process, it is scary. Of course it is. I've done it, gosh, 10, 15, 20 times over the last 20 odd years, but it's still, oh, did I do that right? Did I do that right? You know you did. Everything's there in writing, but the fact that they will still, you know, legal representation will try and nitpick everything.

SPEAKER_00

I think that's why the the payment plan, if the tenant has suggested a payment plan and then not kept to it, you know, because that might be another way around. They might say, Oh, we haven't offered the same plan.

Using Discretionary Grounds 10 And 11

SPEAKER_01

So yes, having that offer delaying it by a little bit further to say that you've tried to give all of these extra things, you've tried to do your best, is really, really important that you do. It's a begrudgingly, I know it is, that one payment plan that you'll try and give them, or that little bit of extra time, or you know, is it possible you can give me that little bit of extra time? So it also, if you've given the possession claim, typically once that's given is the judge will say, Look, I'll give you two weeks to sort yourself out after the hearing. And if for whatever reason the tenant says, Listen, can I have an extra week? Do it. Because if that gets you the possession back, fine. But heaven forbid you have to go back to court to get back possession, for whatever reason, you've given that little bit of leniency there. Those little bits here and there that the tenant may well see as you then getting one over on you, you doing that is just more armoury in your pocket and more ammunition for you doing what you said you were going to do and doing it properly. Now, should it be then that you can't get back possession? The tenant hasn't left and says, I'm not leaving, you can't communicate with them and a whole array of different things, you may then have to go down the bailiff's route. Now, to apply for bailiffs, that's£148. So bear in mind£404 for the possession court hearing and£148 then for the bailiffs. So that is£552 you've paid, let alone the arrears.

SPEAKER_00

And also the time, your time.

SPEAKER_01

Let alone the time. So with all of that, the time scales. I mean, as far as bailiffs are concerned, that could be another four weeks, six weeks. Again, that's what we've had recently round here. But if there is more section eight claims because of section 21 going, that may well extend that further. So the arrears are in place now. So that is typically the process you're going through as far as section eight. And they can argue the this, that, and to the now. As far as the mandatory grounds are concerned, which Allison was pointing out there, this is one thing I have seen in the past, as well as a tenant will pay a little bit here, a little bit there, and get it below that point. Now, that doesn't mean a judge or a magistrate can't grant possession on a discretionary ground. Because here's the thing: if you've got a rental statement that goes through all of the different payments and little bits here, little bits there, they know what their contract says they're meant to be paying and when they're meant to pay it. But a judge can still say, Well, look, fair enough, I can see, but you paid this little amount just to get you just below the mandatory ground. Well, I'm sorry, and this is why it's important on your section eight, you've not just got one term, you've got the mandatory ground, eight, but you've got your 10 and 11 and the fact of that they've got arrears and you've got persistent arrears. So you can still do on those two different grounds of the fact that you're trying to get possession back on those terms. And as long as you've got them in there, you can still get back possession on those terms. And uh, judges aren't rotters in the fact of that they're just gonna be no, you've not done that. Right, I'm okay. No, they've got their headsets on, and I'm pretty certain the landlord that I had in the last the the judge I had in the last hearing was a landlord himself. So I was like, ha ha ha ha, ha ha.

SPEAKER_02

He knows what the story is.

Section 21 Sunset And Section 8

Filing Possession Claims Online

SPEAKER_01

Now, that's all the horror things in the fact of that these things happen, unfortunately. But if you've done everything right from the start, you'll be okay. Now, another avenue you can go down, which we'd recommend to anybody and everybody, is something called Rent Guarantee Insurance and Legal Protection. Now, there are multiple providers out there. The credit referencing agencies that you use will offer this as a bolt-on to your credit and referencing checks. Now, you will have to have an all-singing, all dancing credit and referencing check, which costs you more. I believe with different companies, you've got 15 odd pounds, I think it is, around that sort of figure is what it'll cost you to do those checks. But then that means you've got through the hoop to be able to get rent guarantee. Now, we use Left Alliance, there are other providers, but we use Left Alliance for ours, and we then charge our landlords, and there's different providers who provide different charges, all these different things. We charge our landlords 3% plus some specific VAT of their monthly rent for rent guarantee and legal cover. That comes off what rents that come in each and every month. So that may well increase their costs each and every month. However, if a tenant stops paying their rent and they're paying£1,200,£1,300 a month, times that by five, six, seven months. So it's cost them 3% of their monthly rent, which in the basis of you know, 30%, if it's a thousand pound rent, that's£30 plus that a month, it's£36 quid, it's neither here nor there. But the cover that it gives them. So for the period of which the tenant hasn't paid, the first month is the excess. Okay. So that's not paid for. But typically, if you've got a deposit, as long as the tenant properties left in reasonable condition, that may all cover that. So anything after that first month, they will guarantee that rent for you. So that means your monthly rent is paid each and every month so that tenant will only get to one month's arrears, as far as that's concerned. You've got that rent guarantee in place. Then they will pay that until which point at which they've got back possession of the property. Once you've got back possession of the property, they will then for the following three months, or until you've got the property re-let, pay you 75% of the rent that is due. So basically you've got to get the property back into order, get the property let. So they'll give you some additional cover there for that. In addition to that, you've also got your court fees covered, your bailiffs covered, and you'll have legal representation at the court hearings. The landlord doesn't have to be there.

SPEAKER_00

And serve all your notices as well.

SPEAKER_01

As well as serving all your notices, because as an organization, different agencies, and if if you're doing it yourself, fine, you'll do it. But as us as an organization, if we're having to do extra stuff as far as issue notices like this, as well as go to court, we're going to charge for our time and our expertise in doing that. Because it's not a little thing that's being done. It's areas of expertise that we have to do. And if they were doing it themselves, you have to pay a solicitor. An awful lot more than what we're going to charge, the small fees that we're going to charge, but it means it's done and done properly by people that know what they're doing. So, yes, it's an additional cost, and yes, it's tax deductible because it's something that's for you as a landlord. But rent guarantee insurance, in particular, with the way things are changing now. I mean, we're in a you know, we're about to send out letters to a lot of our landlords now stating to them, look, this is an offer we have, it's not obligatory, but these are all the benefits that you have and the cover that you have in place. I fingers crossed hope you don't have to claim on it. I really do, but it's not waste of money in having it in place. So, yes, I think I've covered everything there. I mean, was there any any other things from from what I've gone over today that you wanted to bring up, Mark?

SPEAKER_02

No, well, I think the whole process and procedure you both explained excellently. Yeah, real, you know, it it so even I can understand it. But no, it's brilliant. The detail and everything that's there. I mean, I I'm a big I think rent guarantee insurance is is basically a no-brainer, a no-brainer now. You know, we we insure cars, we insure, you know, lots of other things. You should insure your phones and stuff like that as well. So if you're a landlord, you should be putting that into your numbers and having it as a no-brainer thing now. You do 3% is is that on single-let properties? What do you what would you do for an HMO?

SPEAKER_01

Same same principle for ourselves.

SPEAKER_00

But here's the thing that we do have a minimum fee for HMO rooms, so but different providers provide different cover.

SPEAKER_01

So I know that we're in the process of reviewing our referencing agencies at the moment. So let's alliance charge you a percentage of the monthly rent. Whereas vouch have a fixed charge per unit. So if you're as we've got lots of HMOs and a number of HMO rooms on rent guarantee, Left Alliance works out better. Whereas if you've got Vouch and it's just all single lets, it may all work out better with that. It depends on the portfolio of your money, it depends on your property, a whole array of different things. But it it's a case of yeah, you will you add up the numbers and the basic number sums on it, different providers will offer different packages that will work out better for you.

SPEAKER_02

Okay, okay. And so you you Joe, you don't really do it on a case by case, you have a product, and that's what you offer your landlords. Yes, yeah, no, that's good.

Court Prep And Tenant Legal Aid

SPEAKER_01

It it in a way we've we've I say unfortunately but fortunately on some things that one particular landlord had a horrible situation of what happened in his property and a lovely family that moved in and they didn't turn out to be quite as right. And he was just so glad, you know. It was a gosh, it was 1100 1200 pounds a month rent. And I think it took I think it was about six months in total. So it's a lot of money, innit? Yeah, uh, he was very happy he'd done it.

SPEAKER_02

Yeah.

SPEAKER_01

And as far as having it in place to peace of mind, isn't it? Okay, smaller lines in particular, when this is just uh, you know, if they've only got one or two properties and they've got not got other properties that are going to cushion the blow of rent arrears, it's really important to have.

SPEAKER_00

I mean, we actually had it on one of our own person that was on a room, and the gentleman we've toyed with giving him a section 21 for a while. He was just one of these tenants that he just used to rub everyone up the wrong way, and that includes the tenants living at the HMO. Us we'd get emails at ridiculous hours, be aggressive, and he'd always be like paying late or paying in bits, and and then he did go over those two months in arrears at one point. So we had alerted the rent guarantee company, and by the time they kind of looked at it and got there, he'd gone under it and he they still want to go ahead with getting them out. He said, Yeah. So they issued the section 21 notice. Um in this case, because it wasn't it was more straightforward. He actually just agreed to go. So we didn't have to go through the accelerated possession or court or anything like that. He agreed to go, but he did leave some arrears, and then it took us a little while. It wasn't the room was needed a clean, but it wasn't left awfully. Took us a little while to get the room relet. So we had that money, that 75% of the for that void period and that small amount of arrears just over that one month deposit. So that was yeah, that was kind of bonus for us.

SPEAKER_01

One thing I will say is making sure that with any of these claims you read the terms and conditions of them because there are certain timescales at which you have to make a claim, otherwise a period of time won't be covered. So, for example, for the letter Lions, you have to make sure before. So, for example, if on the first of the month the rent's due, you have to make sure you've told let alliance by the last day of the month, 30th or 31st. Because they then say, right, this person is in a four-month arrears by this point. And as long as you've done that by that point, you've made every effort over that month to try and get the money back or get the rent paid. That means then, as far as that excess is concerned, they haven't covered that first month. But anything from that point, you can do that.

Evidence Wins: What Judges Look For

SPEAKER_02

Yeah, no, no, that's that's that's amazing. I mean, it just goes to show that you need to have, you know, your properties if you're gonna have them looked after and managed, which is highly recommended. Get the professionals in there. That's why I love having you two in there because the other professionals make sure, you know, uh listen to past episodes that we've done as well, where you've explained what to look out for if you're gonna, you know, when you're gonna employ a management agent and things. But you want to be looking now, particularly, don't we, with the new rules and everything that's coming in, looking at your agents, looking at what they're offering. I mean, that that service of three percent plus whatever it is, you know, about 30, 40 quid a month. But if anything does happen, I know for a fact, you know, there's a legal proceeding that's gonna go out there. You guys are also gonna be on hand to go out and do the job as well. Hopefully it doesn't come to that, but you can sleep well at night, you know. Fundamentally, as landlords, we're in this to make money, you know, to provide good living for people and to make money. Some people take advantage of that. So we've got to make sure that we cover ourselves. And I think today's episode, if you like, has really, really emphasized that and has really also gone through that repossessions, rent arrears, it's it's gonna happen at some point, unfortunately. You know, if you if you have a multitude of properties, somebody somewhere along the line, hopefully fingers crossed, it doesn't, but it's all about, you know, it's not something to be scared. I think a lot of people are really scared of it. It's just a process. But if you've you know crossed all the T's, dotted all the I's, you've got a good company that are keeping you updated, they're on it, they're doing their job, they're doing their part of the bargain, you know. That's I mean, realistically from a management point of view, that's where really you're worth every penny. Do you know? I'm not saying you're not, but you know, that's where you, so to speak, earn your money as well, isn't it?

SPEAKER_01

And the key thing is with the rent guarantee insurance as well, a tenant, if there is a frequent breach of tenancy arrears person, they'll get letters and emails from us. They may not be seen quite as forceful as uh yeah, whatever. I'll I'll I'll pay whatever. However, if they get a letter from a solicitor as far as the rent guarantee insurance solicitors, means business.

unknown

Yeah.

SPEAKER_01

No, we want everyone to be as successful as they possibly can be whilst maintaining compliance. We've got a real passion for that. And if we can help people to get there, fantastic. Obviously, we do videos, galore, all the sorts of different things. We've got a webinar coming up next month, haven't we?

SPEAKER_00

Yep, 22nd of April. We've got a webinar coming up.

SPEAKER_01

Uh it's where you're getting obviously the Renters' Rights Act, all the different things that are coming up. But um, we've got a fantastic day to look forward to later this week as well, haven't we? Very exciting.

SPEAKER_02

We have, we have. So, yeah, we've got the uh property growth summit that you are both coming on and talking. Oh, whoa, you tell me what you're talking about.

SPEAKER_00

So we're talking about the Renters' Rights Act, hot topic at the moment. So you need to know it, you can't avoid it.

SPEAKER_01

Oh, massive, massive changes. Massive.

SPEAKER_00

But yeah, so we're trying to get people prepared. There's stuff that you will have to do in the next few months as a landlord. Most of it rolls out the first of May or the first phase, the first of May, but it is stuff that you need to do kind of before that, really. So yeah, so both on Friday and our own webinar, it's kind of the stuff that you need to do, getting you ready and talking it.

SPEAKER_01

But the funny thing was, who was it was out of? Was it Natasha? I think she went out and there was another Latin agent, can't say who they were, uh, that were talking about the rental's rights. Oh no, no, no, nothing, nothing's happening. No, no, no. It's just going to be spread over a period of time, you know.

SPEAKER_00

It was in the praise I went to that Owner said that another agent had said that she doesn't need to worry about the Rentors' Rights Act now and just to wait till it all happens on the first of May.

SPEAKER_02

Got tall.

SPEAKER_00

I was like, Well, that's not what I would have because she was like, Oh, you you said something completely different and you seem to know what you're talking about. But yeah, unfortunately, there are people out there that are still burying their head in the sand, kind of saying, No, it's not here yet.

SPEAKER_02

Oh, it's coming, it's very much get yourself get yourself prepared, get yourself ready for it. You know, we need to, as property investors, pivot and change with the times. You've got to keep your finger on the pulse, and that's why I always appreciate your time, your expertise as well. I thank you ever so much for today's session. Again, a wealth of knowledge in there, which is is great. And thank you ever so much for sharing it. Great to see you both. Thank you. Take care, and I will see you both in the Friday.

SPEAKER_01

Fantastic Friday. Cheers.