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Dealing with bad tenants can be a nightmare for landlords, causing financial stress and sleepless nights. Whether it’s paying their rent late every month or not at all, damaging your property, or engaging in anti-social behaviour such as drugs, noisy parties, playing loud music, keeping inappropriate pets or causing parking issues, bad tenants don’t just create problems for landlords, but also for neighbours, leading to endless complaints.
Most tenants are good, and if you treat them as you would want to be treated yourself, then they will respond in kind, paying their rent on time and looking after the property. But there are some who won’t respect you or your property and will engage in some of the activities listed above.
While some landlords will at some point experience the hassle of dealing with difficult tenants, fortunately there are steps you can take to minimise the risks. And there are strategies you can use if the worst comes to the worst and you get stuck with a bad tenant.
In this guide, we’ll explore how to minimise the risks of getting a bad tenant, what to do if it happens to you, and how you can protect yourself and your property.
The best strategy to reduce the risk of getting a bad tenant is to take steps to avoid getting one in the first place. But you also need to be prepared and know what to do if you are unfortunate enough to get one.
If you are a new landlord or short on time, it is worth considering using a qualified letting agent, making sure they have the legally required client money protection through a government approved scheme such as Client Money Protect, and are members of a government approved redress scheme such as the Property Redress Scheme, which are both also powered by Total Property. Read our guide to choosing a letting agent for more advice.
If you are a self-managed landlord, there are a number of ways in which you can reduce your risks – from setting up the tenancy and preparing the property to let property, to identifying high risk tenant types, and carrying out robust tenant referencing checks.
As a responsible landlord, it’s important to make sure everything is in order from the outset of the tenancy. Getting everything in place to set up a tenancy and prepare your property to let can seem like a daunting task when there are so many rules and regulations you need to be aware of. So we’ve created a guide to preparing your property to let that explains everything you need to know to fulfil all your statutory requirements and more. And our two ultimate guides to legislation and tax will help you to be compliant with all the lettings laws and regulations on taxes for UK landlords.
It's important to always use an up to date tenancy agreement and guarantor agreement, and make sure you have complied with all the landlord legislation including right to rent checks, deposit protection, not taking too much deposit or charging fees etc. Ideally, have an independent inventory company prepare a comprehensive inventory at the start of the tenancy. This will provide good independent evidence of the state of your property. Read our inventory guide for more information.
There are a few tenant types that it’s important to be on the lookout for as they can present a higher risk. Fortunately, these tenants are in a tiny minority.
Thorough tenant referencing is one of the most important steps landlords and agents can take to protect themselves against troublesome tenants and maximise the chances of having a successful tenancy. Our guide to tenant referencing goes into detail on this topic.
“When it comes to references for landlords, you’re putting a jigsaw together, building up a picture of the tenant’s renting history – whether they've defaulted on rent in the past or caused malicious damage to a property; whether they've had County Court Judgements against them and, most importantly, whether they can afford to pay the rent. No tenant should really be spending more than 30% of their income on rent. Affordability is key.”
- Paul Shamplina, founder of Landlord Action and Chief Commercial Officer of Total Landlord
As a minimum we recommend a four-point check which includes:
As well as the standard four-point reference check, it’s a good idea to ask for a reference from the tenant’s current landlord if they have one. It’s also sensible to ask the tenant to provide their last three months’ bank statements so that you can see their regular income and expenditure.
Throughout the application process and the viewing, you should be assessing the character of your tenant applicant. You should also be doing a thorough interview to test if the information they have given you is correct and that they are in a good financial position to pay your rent. Be suspicious if there is any reluctance or delay in supplying the information you are requesting.
If they come through your rigorous selection process with flying colours you can then, but only then, offer them a tenancy. Don’t be tempted to cut corners on this, however tempting that may be.
If your tenant fails a reference check but, having considered the wider context of their application, you feel they could still be a good fit for your property, asking them to provide a guarantor is a good option. A guarantor is a landlord’s insurance policy against tenant default - someone who agrees to pay the rent if the tenant doesn’t. You will need to reference check the guarantor just as you would the tenant. Find out more in our article, ‘What is a guarantor and who can be one?’
It’s one of those quirks of human nature that offering tenancies to friends and relatives – often making few of these checks – usually ends in disaster. It’s best you keep your lettings on a sound business footing avoiding the complications family and friendship tenants tend to bring. Our guide to renting to family members and friends contains more guidance on this topic.
Rent arrears, late or missing payments are salient features of bad tenants. Many landlords rely on rents to help pay off mortgage debt, so inconsistencies in payment is not just frustrating, it can threaten a landlord’s solvency.
Always collect rents by standing order, that way you know straight away if a payment gets missed simply by checking your bank statement online. And if a payment is missed there are only two reasons why: there’s no money in the tenant’s account or the payment has been deliberately stopped.
Contact the tenants straight away if a payment is missed, either with a polite phone call to see what the problem is, or text them or visit the property. Afterwards, send an email or letter to record the outcome of your communication with them, explaining the importance of paying rent on time and the consequences of not doing so.
You may also send them advice on who to contact in the case of money problems – there are a number of services available to help tenants in arrears including Universal Credit. You should also send them a weekly advice statement showing the current state of arrears, just to remind them that they are in arrears.
A simple prompt may be all that’s required to resolve the situation. But if it doesn’t or if this becomes a regular occurrence, resist getting annoyed or showing your annoyance. Deal with the problem as you should with all tenancy issues, in a professional and unemotional way. Screaming and shouting does no good, and it could make matters worse. Remember there are laws against harassment.
Try to talk with your tenants if you can and possibly agree to a payment plan – a short-term schedule to get them out of arrears and back on track. If the tenants haven’t been able to pay the full rent, for whatever reason, agree how much they’ll pay and by when, to make up what they owe. If you need help with this, you can contact the Property Redress Scheme’s Tenancy Mediation Service.
You might consider reducing the rent in the short-term, after all some rent is better than none and if otherwise the tenant has been good then a small concession on the rent may be worth it. If you do agree to a change, then make sure you put everything in writing for future reference.
If you have a guarantor, keep them informed every step of the way by sending duplicate letters and statements to them. You will need to inform them that ultimately, they will be required to make up any shortfall in the rent payments.
If your tenants are struggling to pay their rent, they may be eligible to get Universal Credit. They can open an online Universal Credit account to manage their claim. They will use this account to report changes, send messages to their work coach and find support. As a landlord you are not allowed to have your own account, it is personal to the tenant, but if they are willing, they can share the details with you.
If your tenants don’t have internet access or are not confident using a computer, their jobcentre can tell them about local services that can help.
You can help your tenants by encouraging them to:
You could use Universal Credit and you to guide your conversations with tenants.
Tenants may also be eligible for other help with housing costs.
If all else fails – you may need to evict
Unfortunately, sometimes tenants in arrears either refuse to communicate and take advice, or get further and further into arrears. If the tenant or their guarantor consistently fail to pay the rent, then you may have no choice but to send them a final letter stating your intention to evict, accompanied by a notice seeking possession – either a Section 21 notice (soon to be abolished) or a Section 8 notice. Your letter will also warn the tenant and guarantor that you will be pursuing the outstanding amount through the courts if necessary.
We would recommend using a professional eviction specialist such as Landlord Action who will advise on the best course of action.
You or your agent should be carrying out regular inspections, with the first being a couple of weeks after the tenants have moved in, then every three months until the tenant has proved reliable. After that you may go to six or 12 months but check with your insurers as to what they require. Often doing inspections is a requirement of your landlord’s insurance policy.
“Our Premier policy offers protection against malicious damage by tenants and their guests, as well as loss of rent if you need to carry out repairs. But for a claim to be successful, you’ll need to provide evidence that you did all you could to prevent the damage from happening in the first place. You’ll need to show that your tenant passed a full and robust reference check and that you carried out regular inspections.”
- Steve Barnes, Head of Broking at Total Landlord
An inspection involves a walk around the property – with the tenant’s permission – with a check list or “risk assessment” form to inspect for any excess damage (remember fair wear and tear is acceptable) or any safety hazards. Condensation and mould is an important issue you need to be monitoring and it’s a good idea to provide your tenant with advice on how to prevent this. We’ve created a damp and mould tenant checklist for you to share with your tenants.
If you find any damage beyond what would be considered fair wear and tear then it could either be made good at that time, with a contribution from the deposit, or left until the tenant leaves. Make sure you document and photograph everything as you will need this as evidence if you need to make a claim against your insurance or the deposit at the end of the tenancy.
In the case of deliberate or malicious damage you need to give the tenant fair warning that such behaviour is not acceptable and may lead to eviction. You need to photograph and record everything in writing and, depending on the seriousness of the damage, and if this is a continuing problem, you may have to consider eviction.
Antisocial behaviour by tenants is one of the most difficult issues to deal with as a landlord.
Usually, the first landlords become aware of the problem is through neighbours’ complaints, other tenants or the council, who might contact you about your tenants’ behaviour. Ultimately your tenants are responsible for the way they or their guests behave. But as a landlord you have some responsibility towards the neighbours. However, since antisocial behaviour is potentially a breach of the tenancy agreement, you have some power over the situation, and you need to take it seriously.
There are lots of different issues that constitute anti-social behaviour, including:
Landlords of HMOs (Houses in Multiple Occupation) must also comply with The Management of Houses in Multiple Occupation (England) Regulations 2006. Duties include maintaining common parts, keeping walkways and gardens safe and tidy, and making sure waste is disposed of properly. Failure to comply with these regulations can result in a civil penalty or prosecution.
If you get complaints about your tenants, you first need to speak to them about the problem in a calm and friendly manner. Explain how their behaviour is affecting others, and warn them about the consequences of repeating such behaviour.
You also need to follow this up in writing explaining what will happen if their antisocial behaviour continues and perhaps giving details of agencies that might be able to offer help and support. If you have a guarantor, send them a copy of all correspondence.
If the bad behaviour persists you need to record every incident. In some cases, you will need to involve the police, in which case you will get a police incident report and a crime number. Keep in touch with neighbours and other tenants if it is a multi-occupied property and take verbal statements from them.
You need to build up a file of documented evidence in case you need to go to court and evict your tenant on antisocial behaviour grounds. If the behaviour persists, you may have no choice but to do this. If you are operating an HMO the council may refuse to renew your licence.
Noise is a common issue. You should encourage your tenants and their neighbours to try to deal with the issue informally. If this does not help, the council might get involved with monitoring the noise levels. The council is responsible for investigating noise complaints and can serve a legal notice on the person causing the problem.
You might consider using outside help with this by contacting the Property Redress Scheme’s Tenancy Mediation Service.
Evicting tenants should always be a last resort, but if all your efforts to deal with bad tenants fail, you may have no choice but to go for an eviction.
Our guide to eviction explains the eviction process and the legal requirements of eviction, as well as providing some top tips to make sure the process is as smooth as possible.
Again, we advise using the services of a professional eviction specialist such as Landlord Action who will advise on the best course of action.
You will need to serve a section 21 or Section 8 notice and proceed through the possession procedure. Currently the Section 21 does not involve a court hearing but all the prescribed information, documentation and actions such as gas checks, right to rent checks and deposit protection must be in order. For Section 8 there will be a court hearing where you need enough factual evidence to convince a judge that your claim for possession is valid given the circumstances.
You can protect yourself not only from bad tenants but also from other risks associated with renting out your property such as malicious damage and landlord liability, by taking a deposit from your tenants and taking out a comprehensive landlord insurance policy.
You can take a tenancy deposit of up to five weeks’ rent. Remember to protect any deposit you take in one of the government approved protection schemes such as mydeposits, also powered by Total Property.
Although landlord insurance is not a legal requirement, a conventional home insurance policy won’t cover you for the higher risks associated with renting out your property. Also, mortgage lenders usually ask landlords to take out a specialist landlord insurance policy. If you let to tenants without dedicated landlord insurance, you could find yourself out of pocket if your property is left uninhabitable by tenants.
“Most tenants take care of their rental property, but there will always be some that cause damage through carelessness causing accidental damage, and others that cause malicious damage, sometimes leading to structural damage costing thousands of pounds to put right. Landlords should make sure they have a comprehensive landlord insurance policy to protect them financially in case their tenants damage their property on purpose, leaving them with a bill that’s far higher than the deposit they hold.”
- Steve Barnes, Head of Broking, Total Landlord
Dealing with bad tenants is perhaps the most difficult part of being a hands-on landlord. Avoiding them in the first place by doing rigorous checks is the best policy. Dealing with problems quickly before they get out of hand is also important – don’t let rent arrears or complaints build up before acting. Be firm but professional in the way you deal with your tenants when there are problems, making sure they are aware of the consequences of their actions. Fortunately, bad tenants are in a minority, so most of the time you won’t have problems like this, but make sure you take a deposit from your tenants and take out comprehensive landlord insurance so that you are covered should the worst happen.
