An applicant applied for the property and passed the referencing process without any problems, including the credit check, employer reference, affordability checks etc. The landlord declined Rent & Legal Insurance.

At the third month’s rent due date, no payment was received and there was no response from the tenant. Ezytrac commenced the arrears procedure and, after a period of time, made attempts to contact the tenant via next of kin and his employer. The employer stated tenant had left his job and they had no contact details for him. Under instruction from the landlord, Ezytrac served legal notices for seeking possession, which wouldn’t come into effect until after 6 months of the tenancy (Section 21) or rent arrears exceeded two months (Section 8 – mandatory grounds for possession).

An inspection was carried out on the property and we established that the tenant had erected a stud wall in the open plan lounge kitchen to make a third bedroom. After consultation with the concierge, we established that the tenant was subletting the property to three other people.

Unfortunately, there is no way of guarding against this situation under the referencing process. (An applicant can simply declare that they are living with friends or relatives and providing proof of address wouldn’t prove otherwise.) However, had the landlord taken out rent and legal insurance, he would have had all legal costs paid for until possession was achieved (four months later) and he would have received the rent in full. Plus two payments of 50% of the rent after possession was achieved, which he could have used towards the works required in the property.

Unfortunately, the local court was inundated with cases of landlords seeking possession orders, so there was a delay of three months in the court issuing a possession order. This meant that by the time the landlord had a possession order, which had to be enforced by court appointed bailiffs, the tenant owed over £8,000.

Call the team on +44 (0)207 812 1255.

Kind regards

Rob Adams MARLA
Associate Director – Head of Lettings