Blurb
In this episode of The LandlordZONE podcast, Nigel Lewis and Paul Shamplina are joined by Suzy Hershman, Resolution Department Lead at mydeposits and Property Redress. We tap into Suzy’s 17 years of experience in complaint handling and negotiation to offer five essential tips every landlord should follow – from setting expectations at move-in to carrying out inspections the right way. Whether you’re a new landlord or a seasoned pro, Suzy’s insights will help you create hassle-free tenancies and happy tenants, which will be more important than ever once the Renters’ Rights Bill becomes law.
Podcast transcript
Nigel Lewis: Hello and welcome to the LandlordZONE. We are here today with myself, Nigel Lewis, Head of Content at LandlordZONE, and Paul Shamplina, founder of Landlord Action, and we have Suzy Hershman, who is now, I've got to get this right because it's quite a long title. So you are the resolution expert at my deposits and Property Redress.
Suzy Hershman: Correct
Nigel Lewis: I think your job is much more exciting than that. …
Suzy Hershman: But in today it’s a bit more involved.
Nigel Lewis: Yeah, I think it'd be fair to say that your job is to really help landlords, tenants and agents sort out quite intractable and quite sometimes fruity problems, isn't it?
Suzy Hershman: On a multitude of different things.
Nigel Lewis: Different things. OK, so today, why are we here today? Because we are going to talk about the five tips that Suzy has put together for landlords about how to run a tenancy. In reality, I think we can call that without too many trip ups to use the polite way of putting it. We can try and help, so we're going to go through those five. Then Paul and I are going to dive in for the next 24-5 minutes and we're going to dive in and ask you questions. You can tell us to away if you don't want to answer them. But, but that's how we're going to do it. So yeah, you want to kick off? So number one.
Suzy Hershman: OK, number one, I think let's start at the beginning and build the right relationship right from the point of…
Nigel Lewis: You mean the relationship with the tenant?
Suzy Hershman: The relationship with the tenant. Once you know they're going to move in, you need to make sure everything's in place. Be open, transparent, approachable, which is key, I think. Yes, you're running a business, but at the end of the day the tenant wants a home, so I think it's remembering what that relationship needs to look like from the beginning. Make sure the tenant - you manage their expectations really. Have they asked you to paint a wall somewhere, you know, make sure you do it ahead of time.
I'm obviously coming from the back of the, you know, the conflict that we see when we get a decision to make, but you can be really nice when the tenant moves in, it builds a really good foundation.
Paul Shamplina: Wouldn't it be nice if it was always nice.
Suzy Hershman: I know wouldn't it be
Nigel Lewis: cuddly resolution.com.
Suzy Hershman: If I have a box of chocolates.
Suzy Hershman: You know. Find out what they like, have they got children, buy them a cup of …
Nigel Lewis: Bottle of wine in the fridge
Paul Shamplina: Can I dive in? Because I think it’s really important.
Nigel Lewis: Go on
Paul Shamplina: So, you know, you look at tenancies, you have landlord doing it himself, maybe use a let only service online, you have agent doing it.
And I agree with you, it's about setting the scene early doors. The problem you have is landlords and agents historically don't spend the time in putting that effort in early doors. When the tenants are going to get their keys, it's when they're nicest because they want the keys.
But the biggest problem that we have in the landlording arena is landlords don't see themselves as professionals. Right. It's a profession, right? So go over the tenancy agreement. Understand what you can and can't do. You could be dealing, presumably, with a tenant as they've been renting for the first time. Or what you can and can't do in the lease with regard to common parts, I think that's, is that a big problem that we come across?
Suzy Hershman: I think there's two things. One is when I go out and train people, agents, landlords, doesn't matter who. I talk about, the start being the foundation. It is. It's like the roots of a tree. If you don't have those roots in place, that tree is not going to stand up and it's not going to work, you know, so I think you're absolutely right, I think one of the best things I've ever seen is a 10 point laminated guide that a landlord gives to a tenant, do's and don'ts at the beginning and throughout the tenancy with numbers on to contact. So everything's all in one place.
Paul Shamplina: Communication.
Suzy Hershman: It's all about communication and actually, like everything in life, it's about collaboration. Because actually, if you work together, there's not going to be any problems.
Nigel Lewis: So would you say that a landlord should be there when they move in, regardless of whether an agent’s running it or not? Do you know what I mean?
Suzy Hershman: Yeah, I think I think personally it's very it's very subjective. You know if you've got, if you're a landlord with 50 student properties, you're not going to be there.
Paul Shamplina: Or you live 70 miles away.
Suzy Hershman: Or you live 70 miles away. I mean, Paul, you would know how many landlords are accidental. So they don't live near the property they may have inherited or come by.
Paul Shamplina: Yeah, I mean, 85% / 88% of landlords out there own between one and three properties of which we're seeing landlords exit but for another reason. But that that is part of the issue. And I see and we talk about conflicts and I'm out on the road and like you training all the time is, landlords don’t invest that time, that energy. Understand education and don't think about evading disputes? They don't. They don't see six, eight, 12 or 10 months down the line because what's the name of the game? The name of the game is have a happy tenant, happy landlord. It's my home. Stay in the property as long as possible. Keep a great tenant. That's what it's about, isn't.
Suzy Hershman: That kind of brings me on to my second point actually.
Nigel Lewis: Yeah, let’s go. Nice segue.
Suzy Hershman: Thank you. Setting expectations so right from the start and it's not just for the tenant, landlords needs to manage their own expectations. You know. We look at wear and tear, which we know is a common problem when it comes to resolving, having a negotiation discussion at the end of the tenancy.
Paul Shamplina: How do you define wear and tear 'cause I think a lot of people have a different view in their head. How does my deposits you know?
Suzy Hershman: Oh, OK. All right. So.
Nigel Lewis: How long have you got?
Paul Shamplina: You got well, just just briefly because I think your landlords want to know about what wear and tear is.
Nigel Lewis: Is a scratch on a tabletop, wear and tear, or is it damage?
Suzy Hershman: A scratch, a deep scratch would be damage, but actually you don't need to replace a table for that, so the landlord wouldn't be able to claim for a replacement. They would just be able to claim a portion of the damage as long as it's not a scratch across the whole table. Or a leg hasn't fallen off, you know? So it's about proportionality. OK, then you've got there's five quick criteria for wear and tear since you asked. At this point, we're talking about how old is the item? What was the quality of the item? At the beginning. And what was its condition at the beginning? Which very often we don't know, two out of three of those as adjudicators. So landlords need to be wise to their own properties, if they’re student properties, they may not put in the same quality as a you would if you were a one property landlord renting to a family or professional couple or whatever it might be, you know, depending on the spec of the property. So wear and tear will have different life spans, and that's one of the other criteria we look at on certain things depending on your tenant and then the length of the tenancy, you have to remember is relevant. Now obviously with what's you know with Section 21 not being there, how long are tenancies going to last?
Paul Shamplina: Hmm.
Suzy Hershman: So that brings me on to the third point, actually, about protecting your property from the beginning, which means doing regular inspections at the right time…
Paul Shamplina: Having landlord insurance.
Suzy Hershman: Having landlord insurance
Paul Shamplina: Having Total Landlord insurance. Plug plug
Suzy Hershman: Plug plug indeed. But also remembering that if you have got specialist equipment. An oak table that you're leaving in a furnished property or something specialist that needs a special type of clean, that you’re giving all of those instructions right at the beginning to make sure that your property is being looked after in the way that you want it to be looked after. And the tenant is aware of that.
Paul Shamplina: But isn't that part of the problem sometimes, because if you think about landlords, especially the small accidental landlords that don't see themselves as landlords, and they used to live in the property, they have an emotional tie to that property. And obviously that furniture is a lot higher spec. So anything that's happened, any small little thing that's happened, damage. Whatever. It's magnified.
Nigel Lewis: It’s their grandmother's table being trashed.
Suzy Hershman: It's magnified, which is why it's so important to have a good inventory.
Nigel Lewis: But also am I right saying that not everyone gets inventory?
Suzy Hershman: Look, remember we only see the problem cases.
Paul Shamplina: When it goes Pete Tong.
Suzy Hershman: We don't see the majority. Inventories still come in a variety of forms, yeah. But the ones we do see are better.
Nigel Lewis: OK.
Suzy Hershman: Than they used to be. I mean, when I started 17 years ago, they were on the back of an envelope. They were, you know, they.
Nigel Lewis: Well, just some photographs, right?
Suzy Hershman: Properties didn't have walls and doors. You know, it was just the furniture.
Paul Shamplina: But but on on inventories, I mean obviously there's really good companies like No Letting Go that, that that are professional companies and a lot of agents they use inventory companies and landlords do a lot of agents do it themselves. I don't know what your thought is on that.
Suzy Hershman: OK, well I.
Nigel Lewis: She said wading into deeper waters.
Suzy Hershman: Deeper waters here.
When again training others and I do get asked that question a lot, do I have to use a third party and actually no, it's about the quality of the inventory and the detail that you put into it because even a professional company. And I'm not naming any names, can provide a poor inventory. The clerk didn't have a good day. You know, they miss things.
Paul Shamplina: But what's the what's the view? Obviously, you know you're head of disputes and resolutions here. What's the view if a landlord, I mean I, you know, one of my talks I did over 50 talks last year and I say to them don't do an inventory yourself if they don't what they're doing. A lot of the time and obviously the detail and the evidence, you know what, what's the view from a deposit providers adjudication, if a landlord does an inventory, it's just the quality of the inventory?
Suzy Hershman: So there used to be going back in time, there used to be a massive difference because we didn't have all the tech out there.
Paul Shamplina: Yes.
Nigel Lewis: There is AI out there. Yeah, yeah, yeah.
Paul Shamplina: And video.
Suzy Hershman: Apps, now the media, the quality of video. And landlords did not appreciate what it needed to look like.
Nigel Lewis: And also it didn't really matter 'cause they didn't have to adhere to the rules as much as they do now do they? So. So now if you're if you wanna, if you wanna, you know, take away from a from a deposit you have to prove it by saying this XY and Z is damaged therefore here's the evidence. In the old days, before the deposit laws came in. Yeah, which is now a long time ago. They didn't have to do that because.
Paul Shamplina: I used to have to go to court. So that, that I actually think out of all the legislation that's come in the deposit scheme legislation was most probably the best bit of legislation because unfortunately landlords think that the deposit is their money where it's not their money. So that you'd have all these spurious court cases happening now the deposit scheme stopped all that.
Suzy Hershman: Yes, yes, massively. It's taken a long time for them, for landlords to understand that. But yeah, it's.
Paul Shamplina: And that legislation only came in 2007. And we’ve got the Renters’ Rights Bill coming up.
Nigel Lewis: I know! Tenant Fee Act…
Suzy Hershman: Where’s that going to take us?
Nigel Lewis: Well, this is it. So it would be, it would be interesting to know if more regulation of the industry, which is where that takes us will lead to more knowledge amongst landlords. Do you think that will happen?
Suzy Hershman: I think that the landlords will have no choice. But I think as Paul knows and the press knows that landlords are selling up, whether they're selling it to portfolio landlords or not, we're not quite you might know more than I, whether
Paul Shamplina: It's a mix and match mix and match.
Nigel Lewis: I quite like the argument that in fact, there's not landlords leaving the sector it’s that landlords are always leaving the sector, but there aren't any new ones coming up to replace them and some portfolio reductions it's been accelerated.
Paul Shamplina: And it’s been accelerated And we've got a lack of stock.
Suzy Hershman: I think it's the lack of stock and the fact that landlords need to get their head around not having section 21 and being able to get their property back without having a really good reason for doing so.
Paul Shamplina: And relying on the courts
Suzy Hershman: Which is, yes, remains to be seen how they're set up
Nigel Lewis: I think it's fascinating 'cause. I I think if you’re a landlord who has had to evict someone in the past and it's not easy on a good day, then I think they're hypersensitive to this and they're much more aware and much more likely to be thinking about selling up. Whereas if you're a landlord who's never had to evict you're quite often ignorant as to what might be hitting you.
Paul Shamplina: Yeah, it's true. And I think you're right. And don't forget, you might have that you know, most tenants leave of their own accord and if you've served a notice the tenant has left and most landlords have never, ever, ever had to use a Section 8. They've used a section 21 which is a fall back plan. So that is going to be a whole minefield in itself. Pleadings, getting the notices correct.
Suzy Hershman: From me dealing with resolution and conflict I think the biggest, biggest tip for anybody out there is to make sure you do regular inspections. Yeah, every three, four monthly up to six monthly. Make sure you're going into a property. The longer that tenancy goes on the more chances your property is going to deteriorate due to wear and tear, but not necessarily due to anything the tenant does, but you need to keep an eye on it.
Paul Shamplina: But that's a problem, though, isn't it? In some sense, I'm talking about access. Ideally, tenants giving consent to go to the property, great with their consent, you know, making sure that you don't have 25 people living there in a subletting scam and all that type of stuff.
Nigel Lewis: Six dogs.
Paul Shamplina: Yeah. Or hoarding and all that stuff. We've seen it all. When I, you know, I tried to expose it on the programme that I did. I think the issue that I had is that I actually wanted the right of access to become a ground in Section 8. I was fighting for that. It's not. You have to go under ground 12. But if a tenant won't give you access, that’s an issue, isn't it, Suzy?
Suzy Hershman: Yes, and not one you can do anything about, unfortunately. The law doesn't let you go in without permission, so I think it remains to be seen how you can deal with it, but at any stage remember you can negotiate with your tenants. Lots of there's lots of ways. Mediation is one we were talking about before we even started recording this to deal with that tenant and ask them to move on.
Paul Shamplina: And on mediation, we talk about mediation because it is important and the and the government want mediation to be part of the court process or the possession process.
You know what we did? I remember when I drove the staff, when obviously I drive the staff most of the time here. But what I did during COVID I said we need to set up a mediation service. We did that with, with, with Suzy and Mike and the others with, because obviously there was an eviction ban for six months and landlords were stuck and tenants weren't doing anything, weren't paying the rent. So we bought. We've got a really good mediation service at Property Redress and maybe you can you can highlight that a bit more but basically, doing deals with tenants makes big decent commercial sense, doesn't it?
Suzy Hershman: It does, and actually, like any mediation, you know or any negotiation, if there's a win, win, lose, lose situation on both sides that's that's a win. You know, everybody's happy parties can move on.
And the mediation we do here is actually very low key and very, very informal and it works so.
Nigel Lewis: If you if you had to put your finger on the most common issue that you mediate. Could you put a finger on it or on them or it?
Suzy Hershman: It is generally, I would say about paying rent, going into rent arrears, you know tenants they can't pay their rent or doesn't want to. If they can’t ever see themselves making it up so they get themselves into a hole. Yeah.
Paul Shamplina: Well, what we do do, which is I think is really good and it makes total commercial sense, especially now the reality is when you go to court in the new world or even now, you're looking at a year’s rent arrears is when you’ve got three / four months’ rent arrears right off the rent arrears, and the tenant leaves in 30 days. Yeah, so and a deed of surrender. Yeah, that's good. That's good business.
Nigel Lewis: Yeah. Yeah, yeah. Yeah, exactly. I mean, I was just wondering because I assume someone watching this is going, when am I likely to get involved in mediation? I'm a landlord. I've never evicted anyone. In reality, it's going to be because they eventually get a tenant who gets behind in, in arrears
Suzy Hershman: Yes, behind in rent or that they want to negotiate something on some level.
Nigel Lewis: And that's the real service, you're talking about.
Paul Shamplina: Yeah, we're a third party, so we have no emotion. We have no skin in the game. Landlord, tenant fractured, he said, she said, you know, we get in there, we work it out. We speak to both parties. We try and bang their heads together and actually it’s not just financial. You've got to realise being a landlord is difficult, right?
It also strains your mental health as well. If you got a problem tenure? Yeah. Who’s trashing your property or doing all this and you're in for a year. Not just a year's rent arrears. And you've got to pay mortgage first. It's a year of grief. So you've it's it's about you know boxing clever isn't it.
Suzy Hershman: Well, yeah. And we want those landlords to stay in the market as much as possible.
Paul Shamplina: Correct, definitely.
Suzy Hershman: You know shortage of stock, you know, when is new stock going to be around, we don't know, but that's that's another segue into, I may say.
Nigel Lewis: Number five
Suzy Hershman: Four! Haven’t done four yet
Nigel Lewis: Oh four!
Paul Shamplina: Getting ahead of yourself Nigel
Suzy Hershman: Maintain your relationships with that tenant during the tenancy. If they're having a problem, make sure what I said in number 1 be approachable. Yeah, be willing to have a conversation with them.
Those regular inspections will help maintain that relationship. If you're employing an agent to do them, then make sure the agent is feeding back to you. Don't you know, I think, Paul, my experience is that sometimes landlords think the agent can do it all and they don't want to hear anything.
And I think that's sometimes that disconnect with the agent and the property can be a problem.
Paul Shamplina: But isn't it an argument? Playing devil's advocate. You know, I'm not controversial.
Suzy Hershman: No, not at the least.
Paul Shamplina: Isn't it an argument? I'm paying my agent a full management fee.
Suzy Hershman: Yes.
Paul Shamplina: Right, they're giving me peace of mind. I don't want to hear that the tenant, you know, has lost his keys at 5:00 in the morning. I'm paying you to do that. Is there an argument to say well, that's what I'm paying my agent for, Suzy?
Suzy Hershman: Yes, but how much are you paying your agent? Did you do a really good deal and is your agent as good as you think they are?
Paul Shamplina: Well, The thing is in defence of agents now. I can't, you do the referencing, you’re methodical with the reference, and obviously we have complaints at Property Redress about agents not doing the right referencing and stuff. But then there is an argument say well, I didn't know that the couple were gonna have a big fight or he's got a drug problem, or whatever it may be in month six of a 12 month tenancy agreement. So it you know, it's hard for agents because of course as an agent you have to be a compliance officer, a mediator, a social worker, a credit controller. You know all these different things.
Suzy Hershman: As a managing agent, though, Property Redress do see lots of complaints about lack of service provided by the agent
Paul Shamplina: Yes, correct.
Suzy Hershman: So they haven't done regular inspections which is in their management contract. You know that.
Paul Shamplina: Most definitely.
Suzy Hershman: There, there are loads. There are a few different common problems that agents are not doing their due diligence. They're not doing fulfilling the contract that they got with their landlord. So landlords need to be very aware that they are looking and employing qualified quality agents.
Paul Shamplina: So that's why and I say I have a slide in my talks where you know finding the right letting agent is worth its weight in gold. It's the most important one of the most important decisions of running a successful portfolio or let because of course there's 10 agents down the High Street who do pick? You know, and that's where you have to take your time.
There's no substitute for having other two or three other landlords that will recommend an agent. I mean, you got, you know, and then all you got, all agents, all reviews and all that type of stuff.
But we do have a lot of complaints from consumers, landlords and tenants about members and I think the biggest complaint not just holding deposits is poor management and communication, isn't it?
Suzy Hershman: Yeah, it goes. It goes back actually to the first point that I made. But you know, build the right foundation that it starts before you even …
Nigel Lewis: I assume you would if you were gonna sign a contract with a letting agent see to manage your property fully. You would, it would say, in that what the service level agreement is and that would include we don't get up at 3:00 in the morning. The tenant is by themselves if they lock themselves out. Thank you very much we charge extra for that, or that's stuff you're talking about, so but that's. But does everyone do that? Do you find that people don't? They haven't really had a frank discussion with their agent before that all that happens?
Suzy Hershman: Paul would know more about upfront sort of signing up an agent employing an agent. I think for us at Property Redress, particularly its agents have not done what they said they would do that they haven't complied with their own agreement. Not managed the property correctly.
Paul Shamplina: I think also that it it's a bigger industry problem. You know, because of course you have lots of letting agents out there, now for an agent to try and find landlords is the hardest ever done. I mean, I go up and down the country training agents on how to attract landlords to your business. The reality is is when you get smaller, newer agents.
And there may be less experience. They don't realise they may have been. If you think about how much time a letting agent or a landlord self management spends in a six or 12 month tenancy hours. It’s hours and hours. And I think you know and then of course, if you look at agents, what they charge historically is very cheap. If you work it out on an hourly rate, it's peanuts. And the problem is the industry has dictated how much an agent charges, but in normal other industries, they'd be charging a lot more.
Nigel Lewis: So I think it's nine, ten per cent isn’t it?
Paul Shamplina: It's 10, 12, 14, 15%. Full management. I think a lot. A lot of the time now. I think the days of an agent doing let only should be dying down.
Nigel Lewis: I think they are aren’t they?
Paul Shamplina: Should be. No agent should be doing that.
Nigel Lewis: So your point number five?
Suzy Hershman: My point number five, my last one, is handling issues proactively. So whenever something crops up, whenever your tenant let’s you know there's a problem or your agent has done an inspection for you and seen something that maybe needs attention that you deal with it at the time. If at all possible.
It avoids things compounding. Issues growing as tenancies go on. And then when you do want to discuss a deposit when the tenancy is ending. Then there's a problem, because maybe the deposit isn't big enough. Yeah. So if you, if you discover something, the tenant has done should have done and hasn't have a discussion with them, you know or has there been a leak where actually the landlord is responsible so that can be dealt with at the time. And maybe, Im just thinking back to cases we've done in the past where the landlords refused to redecorate after a leak. He’s fixed the leak, but then he's refused to redecorate and then tries to charge the tenant at the end.
Nigel Lewis: Oh nice
Suzy Hershman: Because that's the difference between start and end. It wasn't there at the beginning so.
Paul Shamplina: That leads. That's a really good, good point, Suzy. Just, just quickly, I want to, if you can explain to our listeners what's betterment? Explain what betterment is just briefly, because landlords try it on as a betterment, and I think people don't understand about this in the industry.
Suzy Hershman: Let's say we have a new fridge. Right. We have a Beco fridge. It's functional, it’s a good budget model, whatever it might be. The landlord at the end of the tenancy says, well, the tenants broken the drawer. The light's not coming on. I need a new fridge, right? Just so happens we know from the communications, for example, that landlord’s also going to be moving back.
Paul Shamplina: He wants a new fridge!
Suzy Hershman: He wants a new fridge, firstly and then he puts in an estimate for a Smeg fridge. That's very clear betterment. The hardest one for us to judge is maybe carpet, because we’ll never know what quality of carpet is on that floor. A picture doesn't tell you what quality is.
Nigel Lewis: Doesn't really do it.
Paul Shamplina: It's funny actually. You just sparked it. I know we’re coming to the end, when we do so many different disputes, I think we've done like nine and a half thousand last year adjudications. Just for mydeposits. So I think we took over 138,000 calls, to our call centre from landlords, tenants and letting agents on deposits. It's amazing. I think that that the call time believe or not is two seconds that we pick up the phone. It's phenomenal, absolutely phenomenal. It's amazing.
We get the strangest things that happen. We get stuff sent in, don't we? On complaints we had once we had, didn't we have bed bugs that were sent into the office?
Suzy Hershman: Yeah. So we had a Jiffy bag arrive. Yeah, a Jiffy Bag with a piece of curtain in there.
Nigel Lewis: Oh my God.
Suzy Hershman: There was curtain saying this is where the bugs nested or something and made cut a piece of curtain, and we do stress don't send us physical evidence but you know, yeah.
Paul Shamplina: Because it's emotive, isn't it?
Suzy Hershman: It’s emotive, yes, they’re very upset by it.
Nigel Lewis: Hmm. Yeah, of course. OK. Well, thank you very much indeed. That has been fascinating talking to you 'cause, it is a rich world in which you, rich waters in which you swim to use a comparison. So if there's one magic wand, you could wave over the industry or maybe even two wands, what would it be?
Suzy Hershman: Well, I would say in an ideal world, every tenant would have the home that they want, wherever they want it and at the unaffordable rent for them. But. And every landlord would have the perfect tenant, who looks after the property and pays their rent. So for me if there was one thing I would like to think about it is to make sure there are enough homes for all prospective tenants. And we know that is not happening.
And I would also really like to move away from landlord and tenant and maybe talk about property owners and property occupiers.
Paul Shamplina: Yeah, I agree with that. You know what? Let's get you in Parliament. We're feeling the love, Suzy.
Nigel Lewis: Angela, are you listening? Thank you very much indeed. That was really fascinating.
Suzy Hershman: Thank you very much. Thank you.
Nigel Lewis: So thank you very much indeed, Suzy. Much appreciated for your time today and also to Paul Shamplina as always, founder of Landlord Action and well, I thank myself, Nigel Lewis, Head of Content at LandlordZONE.
Paul Shamplina: You know, I'm gonna thank your mother as well for being here.
Nigel Lewis: Well, she will be watching, believe me. And we say thank you to you for watching as well. We appreciate that. And remember to visit LandlordZONE for the latest and breaking news.
