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Rent Guarantee, a cautionary tale

Last month was one of the more challenging in the year.

Homelet appointed representative

Homelet appointed representative

Unfortunately one of our tenants had come under financial stress and was unable to pay the rent. This left my landlord (Mr Griffin) in distress and unable to pay his mortgage and bills. It doesn’t seem fair when landlords buy their properties for an investment and the rent is not paid.  Thank goodness Mr Griffin came to Sewell & Gardner, where we offer free rent guarantee for the first year for all our tenancies (references must be passed through Homelet to qualify).

Mr Griffin was delighted that he had taken advantage of our  full management  service and  I was able to take control of the situation. I immediately instructed Homelet to serve the relevant Notice Seeking Possession pursuant to S8 Housing Act 1988 (as amended) and proceedings for possession were prepared.

Mr Griffin gratefully received the rent payments from the rent guarantee policy and he was able to pay his mortgage and avoid a debt situation!

Homelet kept us informed of any changes ahead of the pending court hearing on the 11th September 2012.

I tried to contact the tenant to discuss her payments and situation but she never answered my calls or emails. On the 10th October I received a copy of a defense statement from the tenant that had been handed to the court for the hearing tomorrow.  It basically told of her financial difficulty and as a single mother she had nowhere to go. She said she would pay in installments but this had been offered to her many times and she had never accepted or even discussed this.

The tenant’s suggestion for repayment of the debt was pretty unrealistic in front of the judge, even though she brought her child with her.  So he granted 21 days eviction. It turned out that she had fallen foul of her work permit and therefore the home office had reduced her hourly working limit while her applications were reassessed, so she couldn’t afford the rent going forward, let alone the payment of arrears, plus she also had other debts she was servicing.

But the story doesn’t end there……  Sadly the tenant failed to leave the property on the 21st November as ordered by the court and a bailiffs order had to be granted.  The Bailiff has confirmed that the eviction will now take place on 21st December 2012 at 1.00pm.  I have booked a locksmith who will also attend to secure the premises against re-entry.

 

The locks will now need to be changed to prevet re-entry

 

So, what is the moral of this story??

For me, it is the fact that you can not fully safeguard against tenants non payment of rent.  As we all know circumstances change and individuals may lose their jobs, become unwell and are unable to pay, even those that most want to!  Of course Sewell & Gardner do everything possible to rent our properties to the most reliable and professional tenants.  We ensure they are fully referenced, our negotiators get to know them personally and landlords can be introduced before offers are accepted.  However,  most of all please, please ensure your tenants have full references and RENT GUARANTEE INSURANCE, I promise you that Mr Griffin would never rent his property without it and neither would I…!!

 

 

Susie Griffiths

Property Manager

 

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