Landlord & Tenant: Getting The Relationship Right

November 17, 2018

Your relationship with your tenant is a valuable asset.  As soon as you hand over the keys they have exclusive possession and you can then only access the property with their permission or a court order, so getting on well is imperative. They are your eyes and ears in the property and will help you protect your asset.  They are also your customers and you need to keep them happy to maintain your cashflow. Falling out can be painful and expensive and getting on well with them will feel good and make you happier.  Good tenant relations are a key part of a successful property business.

As a landlord your aim should be to avoid misunderstandings, bad behaviour by tenants, good tenants leaving early and being stuck with a difficult tenant.  We also want to avoid inter-tenant disputes in shared houses and the build up of arrears.  We should aim for clear boundaries, a clear contract and explicit ground rules.  We need to provide guidance on what to do in common situations.  We are also aiming for well managed repairs and easy access to the property.  Ideally we want to feel comfortable with and about our tenants and able to be honest and open with them.  Here are 10 keys to success in landlord tenant relations:

1. The Pre-Meet: A robust selection process is crucial.  Setting clear criteria means that you can carry out an initial sift and only conduct viewings with applicants who meet the criteria.  Always get previous landlord and employer or accountant references and a credit check.  If your applicants have been assessed by an agent, make sure you meet the preferred candidate before you formally accept their offer.  Ask open questions about why they like the property, how they live and who will live there. Open questions give them the opportunity to disclose information so that you can assess them against your criteria.  Tell them about your expectations and your approach to being a landlord.

2. The Induction:  Your check in meeting is like an induction.  You are establishing the relationship and setting the tone. I recommend providing a tenant handbook containing information about the property and all the appliance manuals.  You can use it for all the legal documents you need like the EPC, licence, DPC, Inventory etc.  Talk about the best way to report repairs, for example the importance of reporting them promptly and sending pictures.  Explain the difference between what they can do themselves, routine and urgent maintenance.  Raise the issue of subletting by asking them who will live at the property.  Explain that they must not move anybody into the property without asking your permission and that this might have licensing implications.  I also go through security and minor maintenance issues, collection of refuse, disposing of bulky waste, getting to know the neighbours – just include everything on a list that will be useful for all of you to talk about.

3. Have Clear Guidelines:  Over the years, I have written policies on various topics, just to try and capture experience and learn from things that have gone wrong.  So now I have policies and procedures on sharers swapping tenants, paying rent, pest control, changing appliances, routine inspections and check in and check out.  I think it’s a good idea to write your own that reflect your values.  If you’re uncertain share them with colleagues in the landlord community to get their feedback.

4. Repairs Policy: Repairs and maintenance is such a fundamental part of our relationship that I think you need to abide by some clear principles and put them into a policy and procedure.  My policy includes five key areas.  Firstly what the tenant is responsible for (anything a home owner wouldn’t call a tradesperson out for) and what the landlord will deal with.  I have a triage process where I ask them to send me pictures so that I can decide who needs to attend or offer advice to them on what to do.  I list contractors that I use in my policy – it’s important to have a solid reliable team.  Some of my contractors have keys and parking vouchers for all of my properties so that they can attend quickly. My policy explains the difference between general and urgent repairs and what to do in an emergency.  I provide a landline number which diverts to my mobile or sends me a text when a message is left.  My policy also has a section on insurance.  Tenants are advised to get their own contents insurance.  If they cause damage that is an insured risk, for example damage pipes that then cause a flood, then they may have to pay for the repair or the insurance excess.  Generally I prefer not to make insurance claims for amounts under £500 because they can have an adverse effect on future premiums of all of my let property policies.

5. Manage Rent Arrears:  In many cultures it can be awkward talking openly about money, but where the tenant has problems paying it is very important to raise the issue promptly and manage the situation firmly and fairly.  Of course, the best way to avoid arrears is to get the right tenant in the first place – and referencing is vital.  Working out a fair policy in advance helps because then you don’t have to make spur of the moment decisions under pressure. My policy explains how to pay – by standing order or bank transfer, or rarely by cash which as this incurs a bank charge of 0.7%.  I do offer some flexibility around the rent due date – it can be adjusted to be closer to the tenant’s pay date.  I encourage them to get in touch as soon as they think they might have difficulty paying.  If I haven’t received payment 3 days after the rent due date I contact them, if they haven’t paid within 10 days of the due date they are officially in arrears and I issue a section 8 notice to protect my rights.  I explain I don’t want to take court action, but I need to begin the procedure just in case the situation deteriorates. Usually this is not necessary as we agree a payment plan.  I always set a review date and follow up.  So if a tenant says they can’t pay the rent on 1st when it is due, I suggest a date by when it should be paid – for example 10th and I say I will contact them to review the situation that day.  Talking is always better than taking legal action – that should be a last resort.  I think it is better to have fixed 12 month contracts with 6 month break clauses so you can plan ahead and contracts have natural endings.  With periodic tenancies (where it rolls on month by month) you have to make a big issue of ending the contract and it can feel sudden and unfair from the tenant’s perspective.

6. Communication Skills is a big topic.  I find they are particularly important when you encounter tricky situations, for example subletting, noise issues, failure to report repairs, untidiness, ending a tenancy tactfully, décor and putting up shelves, pest control and rent reviews.  Think about the best way to contact the tenant about the particular issue: email can be a bit formal and feel like an exchange of position statements.  Phone gives you a chance to talk thinks through – there is more dialogue.  Face to face is good for empathy and to get people to learn or change their behaviour or to counsel them, show you understand or to gently exert authority.  Think about how you come across – how approachable are you?  It’s a good idea to learn about assertiveness and maybe go on a course as this helps you understand passive and aggressive behaviours and how to set up situations that are most likely to result in a positive outcome.  Your aim is to build rapport and get a feel for what is going on.  Facilitate yours and their understanding by asking open questions.  Adopt an evidence gathering approach so that you can establish the facts.  Sometimes you need to give a clear instruction like: “don’t play loud music after 11pm on weekdays.”  Try to recognise your own feelings – sometimes you may need to manage your anger and not let it impair your professionalism.  Be clear to yourself about the outcome you are looking for and in some cases be prepared to compromise.

7. Planning: Key moments in the first year are 3, 6 and 9 months in and the renewal.  I always explain to tenants at the induction that I would like to return after 3 months for a routine inspection.  This involves going into every room to visually check electrical fittings, looking for leaks, damage and repairs issues.  It is also to check that the tenant is using the property in accordance with the tenancy agreement – so look for any signs of illegal activity or subletting.  If there are any problems, then the tenants have a month to put things right before you can activate the six month break clause by issuing a s21 notice at month 4.  So month 6 is important if you need to prematurely end the contract – in practice this should happen very rarely.  Month 9 is the time to conduct another periodic inspection to check you are happy before offering a renewal.  It’s also a good moment to ask about their plans.  If they are unsure about whether they want to renew, ask them to confirm by month 10 so if they are leaving, you have plenty of time to find a replacement.  I recommend bi-annual rent reviews – a second year at the same rent is an incentive to stay and it shows you are reasonable around increasing the rent.   If the tenant is leaving, aim for a good ending.  I now meet tenants a few weeks before they leave to walk around the property and discuss what might need doing to maximise the chances of their full deposit being returned.

8. Know Your Stuff: Keep up to date with regulation by joining a landlord association, going to regular meetings and reading publications like UK Landlord, RLA magazine and Property Investor News or through websites like Property Tribes.  Become accredited to show you are serious about your work and have high standards.  You will have to do continuous professional development like attend meetings and courses which will help you develop your property and tenancy management expertise.  When you are speaking to tenants be in possession of the facts – how the law works and important dates like when the next gas safety certificate or tenancy renewal is due, depending on the issue you are discussing.  When you call your bank, insurer or mobile phone operator, you expect them to be able to quickly access key information.  I have spreadsheets that capture key data like this and I can access it on my phone whilst I am with the tenant.

9. Effective Team: Your team should share your values.  I stopped using a pest control contractor because he would talk about the horrors of pests within ear shot of tenants which did nothing to calm their nerves.  You obviously need them to be skilled, reliable and reasonably priced – they are my three criteria for tradespeople.  I recommend setting up systems to make repairs work as efficiently as possible.  I have installed dropbox on my builder’s phone, so I can share job sheets, tenant contact details and photos with him.  There are lots of apps around too if you prefer to use those.  I think it’s important to follow through on repairs to check the contractors has attended and that the problem is satisfactorily resolved.

10. Customer Service: Please don’t be a penny-pinching landlord who buys the cheapest furniture and fixtures.  It sends a message to the tenant that you don’t care about them – so why should they then care about your property?  In my experience it’s always better to repair properly rather than patch up – the repair will last longer, the tenant will be happier and it will take up less of your valuable time in the long run.  I try and find low maintenance solutions – for example don’t bury a mains pipe under concrete in the kitchen if you can run it behind the kitchen cupboards where it will be easily accessible if it leaks.  If in doubt ask the tenant what they need rather than making assumptions and seek feedback on repairs.  You need to think about the type of service you want to offer.  I like to think in terms of retail brands – I’d rather provide John Lewis service than Poundland.  For example when a washing machine develops a fault, before I visit to assess it, I check when the tenant will be home in the coming days in case I need to replace it and I research new machines in advance.  If when I am at the property, I find it needs replacing, I can place the order for the new one there and then. I use ao.com and I find they are excellent for quick delivery, recycling and installation.  Be aware of important life events for the tenant, like weddings etc as this can add a personal touch.  I delayed a rent review by a year for a tenant this year because they were getting married.

 

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