The 5 Mistakes Landlords Most Commonly Make

The 5 Mistakes Landlords Most Commonly Make

What are the 5 mistakes landlords most commonly make?  Here are the ones we frequently come across -

Not getting the documentation right
This is critical.  Without proper documentation, landlords risk creating a tenancy they can’t easily end.  Your tenancy agreement needs to fully protect your interests and also spell out all the circumstances which might make you want to make a claim on your tenant’s deposit.

Your tenancy should be a Scottish Short Assured Tenancy.  As the law currently stands you can end such a tenancy whenever you choose, at or after the initial contracted term.  For your tenancy to be a Short Assured Tenancy you must serve a valid AT5 form on each tenant before the tenancy is created.  If you do not do this, the tenancy will not be a short assured tenancy and you might struggle to end it if your tenant does not want to leave.

A potential client, who wanted us to take over responsibility for managing the tenancy he had created some time ago, said to us when we asked for copies of his documentation, “What’s an AT5?”

There are a number of other statutorily required documents landlords must serve on their tenants, and you’ll be at risk if you fail to get this right.

Key tip: Make certain your documentation is statutorily compliant and complete.  Take and follow advice.

 

Not referencing prospective tenants
Surprisingly, many landlords are prepared to accept a prospective tenant on the basis of a self-generated reference or a reference from an existing landlord.  Most of us like to see the best in folks but, as a landlord, you’re running a business and it’s essential to carry out due diligence.

Do not take applicants at face value, however plausible they seem.  Does that glowing reference from your applicant’s present landlord disguise the fact that he or she is desperate to see the back of the tenant?   Thoughts like these do not mean you’re being unkind or inhuman.  They are essential if you want to stay clear of difficulties.  In 11 years of running our business, we’ve never lost a landlord a penny in rent nor had a property deliberately damaged.

Key tip:  Pay a little to obtain a professional reference.  A professional referencing company will undertake checks for address history, non-payment of rent, criminal activity, credit worthiness, and employment status.

 

Not maintaining open lines of communication
It’s key that your tenants feel able to approach you.  That way, they will be more inclined to let you know of any problems or items needing repair before they become major issues.  Give them contact details and encourage them to stay in touch.  Remind them they have an obligation to let you know quickly of any repairs which may be required.  If they do contact you, let them feel that the approach is welcome, not a nuisance.  Equally, give them a ring or drop them an e-mail occasionally – not too often – just to let them know that you are interested in how things are. 

A word of warning though:  Don’t let the landlord/tenant relationship become so cosy that taking a firm line where necessary becomes difficult.

 

Not carrying out mid-term visits
Looking in on your tenants periodically, by appointment, is absolutely key to avoiding problems.  It lets you see how your property is being treated, whether there’s laundry being aired indoors leading to condensation and fungal growth, whether a “guest” has been moved in (count the toothbrushes) or (not yet an issue in Inverness as far as we’re aware) whether the second bedroom is given over to cannabis cultivation.

And yet, surprisingly few landlords carry out periodic visits.  Again, this comes down to due diligence.  You are running a business and you absolutely must make certain that your key asset is in good hands.  This is not being intrusive, although if after a few visits you have found all to be well you could reduce the frequency.

Key tip:  Make diary entries to arrange visits three or four time a year, reducing the frequency if you find all to be well.

 

Failing to understand that the property is no longer yours
It’s yours in title of course and that won’t change, but once a tenancy has commenced your property is no longer available to you.  Your tenant is legally entitled to privacy, and you cannot just turn up and go in.  You can’t even carry out those mid-term visits without your tenant’s agreement.  Neither is it lawful for you to retain a key to the property without your tenant’s consent.

Key tip: When you set up the tenancy, insert a condition in your tenancy agreement obliging your tenant to permit reasonable access by prior arrangement.  Also request your tenant to sign an authorisation entitling you to hold a key and to take entry, or authorise tradesmen to do so, in case of emergency when your tenant is away.  You'll be breaking the law if you do so without that authority.