A cautionary tale about rent guarantee insurance.

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    A cautionary tale about rent guarantee insurance.

    You know I don't post often, but when I do I try to make it worth reading! Hopefully this is one of those occasions.

    A landlord came to us for advice regarding this situation. We were unable to really help, but we learnt disappointing things from his experience, which I want to share.

    LL found a tenant, carried out reference checks with a reputable company and got rent guarantee insurance. Basically he did everything right but still ended up pretty screwed.

    The tenant never paid another penny after moving in, was duly evicted (taken care of by the insurance underwriter's legal team), and that's really the beginning. As an aside apparently the bailiff at the eviction told the LL he'd recently evicted the same tenant from another property in the area, meaning (I assume) that the T had managed to find another property and pass the references before her CCJ got registered.

    The T left all belongings behind and started threatening the LL that he had better not touch or dispose of them or he would sue under the Tort/Interference with goods regulations. So the landlord went back to his 'solicitor' (actually a paralegal) that had been supplied by his insurer and said 'what do I do'. HSolicitor said 'I don't know, and I'm not advising you anyway because I haven't been paid to do anything beyond getting you vacant possession'. The landlord said he felt he hadn't actually had vacant possession since he now has a house full of stuff he couldn't do anything with. The solicitor shrugged his shoulders and the landlord went back to the insurer who - after a bit of arguing - decided to fund an opinion on the matter.

    In the meantime the T had missed 3 agreed appointments to collect their stuff and then wrote the landlord a letter saying the HE didn't attend the appointments and left the poor tenant standing outside a locked property (to which the T apparently has witnesses!). LL is therefore depriving T of access to his stuff and so T is filing a court claim. It seems pretty obvious that the T is going to try and get some sort of payout from the LL. Look out for claims of missing rolex's etc. LL had good sense to take an exit inventory, I can't imagine for a second that would stop T from claiming the LL had pocketed/removed valuables before taking the inventory.

    The solicitor subsequently told the landlord to bin the stuff after 14 days as per the terms of the tenancy, but them became squeamish and said to put the stuff in storage instead. LL wanted to cover his back has tried to find a pro firm to do it, but none are interested in becoming embroiled in a situation with a T who is obviously looking for someone to sue. So LL is basically stuck awaiting the tenant's next move.

    I told him to ask his insurer to fund a specialist solicitors like Anthony Gold to advise instead of the current shower. Their response was negative. At the time of writing it's still in limbo!

    Looking at T's reference application I noticed that the employer's website was down and the domain was actually registered in T's name! To top that the HR contact's mobile number when googled was actually on an internet ad listing with the tenant's name on it! Yet the T passed the reference. I'm not sure what that says about the quality of professional checks!

    As far as I see it the landlord has more than met the conditions of the AST and can dispose of the stuff (served appropriate notice etc) and since the tenancy was ended by court order the T can't claim shelter from any of the provisions anyway, but a nagging part of me thinks LL is supposed to keep goods for at least 3 months if money is owed??? I wasn't willing to give the LL advice beyond getting a specialist solicitor (for obvious reasons), but it raises another important question that I don't know the answer to either: does the tenant's signing of an AST which state the LL can dispose of uncollected goods with 14 days' notice waive any right they have to sue under the Torts & Interference with Goods Act 1977?

    So what is to be learned going forward? Well for starters do some basic checks over and above the normal referencing yourself. Chances are the tenant won't be faking it if they say they work for Proctor & Gamble, but if they work for 'John Smith & Co.' you just don't know. Secondly, if you're in a situation like this, take a witness to any appointments you make with a tenant. Thirdly ask your potential rent guarantee insurer what they actually will do to deliver you vacant possession before you actually take the policy. Fourthly....don't be a landlord . In all seriousness, this is yet another thing to budget for in your slush fund: costs of removal and 3 months' storage.

    #2
    I am pleased to see that no less an authority than the government's own 'How to Rent' leaflet says on page 7:

    The landlord is entitled to dispose of possessions left in the property after, typically, 14 days.
    Maybe this will help your client.


    https://www.gov.uk/government/upload...2015_FINAL.pdf

    Comment


      #3
      We're the references done by a company pre-approved by rent guarantee company?

      Seems more a story about a landlord who failed to get/act on good advice.


      Hope the little crooked scr+at of a tenant gets stuffed. Clearly you can't do what I did in the past after a bad experience: Go round all the letting agents in town in person to explain I would be happy to provide references for certain named individuals: Long meaningfull pause: But those named individuals might not like my references.
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        I don't want to criticise HM Gov (or open myself up to flaming on here) but I've got nagging feeling if T owes LL money before notice of intended disposal is served then it needs to be 3 months, not 14 days. Again I'm not sure, hence my asking if anybody here can confirm whether a clause in a signed AST can replace the default position under civil law???

        Comment


          #5
          Originally posted by theartfullodger View Post
          We're the references done by a company pre-approved by rent guarantee company?
          Yes, a big name in the industry, I won't mention the name, for obvious reasons.

          Comment


            #6
            Wow, worth suing them (but they will have expensive lawyers).

            Interesting story, thanks for posting!
            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

            Comment


              #7
              The problem with the government advice is the word "typically".

              The landlord (as involuntary bailee) has to act reasonably and demonstrate the tenant had the opportunity to recover their goods prior to them being disposed off.
              "Reasonably" is another weasel word like "typically".

              The landlord has already made reasonable efforts to return the goods and the tenant has failed to show, and the landlord has supporting evidence.
              I would make a final attempt, clearly described as such, again with witnesses, and then either sell, dump (or if being ultra careful) continue to store the belongings and move on.

              It would be useful to make reference to the state of the pile of cr4p that's been left behind (because the tenant will then have to say "hang on, what about my tiara" or have a problem with the case later, allowing the landlord to say early on that its not there (and why did you not turn up the last x times if there was something so expensive that they - mistakenly - thought was there).

              What the landlord definitely can't do is use the left behind possessions in lieu of the money owed - unless the tenant agrees (and don't even think of going there!)
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Thanks. I actually also think that under the act the landlord is supposed to keep the goods for 3 months if money is owed before the notice is served that the LL intends to dispose of the goods. Also LL is obliged to sell the goods by the most typical means (ebay???), deduct any costs incurred in removing/storing/selling the goods and then return any money left to T. I don't think the landlord can use money made on the sale of the goods towards the rental debt. Again, happy to be wrong!

                It's a pity the LL's solicitor has taken the cowardly approach, at the landlord's further financial cost, naturally.

                For the purposes of everyone reading this now and in the future, does anyone have a notice of intended disposal that they have used successfully (i.e. has been tested in court) that they are prepared to share around? It's not much help to this guy now, but might be useful to someone going forward.

                Comment


                  #9
                  My understanding of the Torts (Interference with Goods) Act 1977 is that the 3 months period only applies if money is owed in respect of the goods, which should never be the case with a tenant's goods left behind.

                  I don't think the landlord can use money made on the sale of the goods towards the rental debt
                  I would think that this would be a case of 'I owe him x, he owes me y' therefore the net debt would only be the difference. That is to say, I would only send the tenant whatever is left from the proceed of the sale after having deducted the arrears from it. If the tenant is not happy, he can sue and the landlord will counter-claim for the rent debt and the tenant will probably be the one ending with a CCJ.

                  Comment


                    #10
                    I hesitate to recommend what they do in America:

                    Comment


                      #11
                      Originally posted by visum View Post
                      Thanks. I actually also think that under the act the landlord is supposed to keep the goods for 3 months ......
                      It depends what the AST says on the matter: If nothing, probably 3 months would be wise:

                      As I assume you supplied the AST what did it say about abandoned goods??

                      http://www.landlordzone.co.uk/conten...ods-in-rentals

                      My last tenancy (albeit Scottish bit you get the idea..) says
                      The tenant will be responsible for meeting all reasonable removal and/or storage charges when items are
                      left in the accommodation. The landlord will remove said items and store them for a maximum of one month. The landlord will notify the tenant at his last known address. If the items are not collected within one month, the landlord will consider same to be abandoned and shall dispose of the items. The tenant shall be liable for the reasonable costs of disposal which may be deducted from any funds arising from the sale of the items or the deposit.
                      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                      Comment


                        #12
                        Many thanks (jjlandlord) for clearing that up. That intuitively makes more sense than the other scenario, but the law is often far from intuitive!

                        So one question that I have no clue about still remains: does a signed AST which states that LL can do X with any goods remaining in the property after Y days successfully protect the LL from civil action under the Torts & Interference with Goods Act 1977 if the terms differ?

                        This is the crucial question I think, as if it doesn't then LLs should be rewriting the clause in their tenancies to fall inline with the act, or there could be a lot of tears later!
                        Last edited by visum; 12-10-2015, 18:00 PM. Reason: To make clear who I was thanking.

                        Comment


                          #13
                          No, I didn't supply the AST but it says (in a nutshell) the landlord will give a notice of not less than 14 days and then can do whatever he likes with the goods.

                          Comment


                            #14
                            I can sue Dave Cameron for being a smarmy PR man: I may or may not win, the Judge will decide...

                            Ditto Tenant can sue Landlord if unhappy with, say, disposal of goods in line with contract terms if unhappy about it...: The Judge will decide who wins..,
                            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                            Comment


                              #15
                              theartfullodger,

                              Yep, that much is clear. My previous experience says that such an event might not equate with actual JUSTICE though

                              Comment

                              Latest Activity

                              Collapse

                              • Grade 2 listed - requirement for an EPC
                                HantsAgent
                                I have a potential client who wants me to rent his Grade 2 listed barn conversion. It's a lovely property and he currently has it on the market for sale with another agent.

                                They currently have an EPC for it (even though I don't think they needed one) and it's score is F.

                                After...
                                02-05-2019, 20:00 PM
                              • Reply to Grade 2 listed - requirement for an EPC
                                AndrewDod
                                I wonder how many perfectly good buildings (and cars, and fridges, and light fittings) have been scrapped or destroyed as a result of these environmental evangelists. I suspect they are responsible for a great deal of environmental destruction (both planetary destruction and destruction of our infrastructure)....
                                19-07-2019, 22:39 PM
                              • HMO trouble!
                                Jamesp1986
                                Hi everyone,

                                I've been renting a property out to a family and one of their friends for the last 2 years. The council have just told me that I should have applied for an HMO licence for the property as it now fits under new HMO rules. The problem is, that I remortgaged the property as a...
                                19-07-2019, 18:43 PM
                              • Reply to HMO trouble!
                                AndrewDod
                                a) Inform the mortgage company "I have been inadvertently fallen within a potential category of HMO through no wish of my own. My understanding is that it remains a single-let tenancy as there is only one AST and one single joint tenant. I am taking steps to evict the tenants as soon as possible....
                                19-07-2019, 22:24 PM
                              • Reply to HMO trouble!
                                KTC
                                Single-let doesn't necessarily mean a single family, and HMO doesn't necessarily mean multiple tenancies. It's perfectly possible to be both single-let and HMO.

                                What's the definition of single-let in your mortgage? If it just mean a single tenancy, is that what you have? If not, then you...
                                19-07-2019, 21:36 PM
                              • S21 confusion documents not issued prior
                                blinko
                                Guys I have a question .

                                I issued a tenancy in april 2016 the tenancy agreement was signed. I gave keys to the tenancy 1st march 2016 and protected the deposit and gave him relevant paperwork BUT I didnt get any proof I issued the paperwork.

                                So 20th april i re did everything...
                                19-07-2019, 11:11 AM
                              • Reply to S21 confusion documents not issued prior
                                blinko
                                Of course but the challenge is not that the safety is is not being observed because for example consider the gas equipment to be faulty in the property blows up house burnt down everybody loses so so for me I would like to think that this is common sense.

                                requesting here appears to be and...
                                19-07-2019, 21:11 PM
                              • Reply to S21 confusion documents not issued prior
                                KTC
                                I have to respond to this.

                                Whether you are pro-landlord or pro-tenant, the safety of the occupiers are a hell of a lot more important than the ability of a landlord to evict a tenant without grounds....
                                19-07-2019, 20:48 PM
                              • Reply to HMO trouble!
                                alex1
                                The general rules for HMOs in England and Wales are described at https://www.gov.uk/house-in-multiple-occupation-licence:

                                [/LIST]So assuming that the friend of the family counts as a separate household, if there’s five or more people in the property, you probably need a licence. If there’s...
                                19-07-2019, 20:43 PM
                              • Reply to S21 confusion documents not issued prior
                                blinko
                                Thanks for your thoughts guy is so yeah this is correct that for sure I am not able to prove that I served the correct documents prior to the tenant moving in and I have served them on three other occasions since as we have renewed the ast everything has been renewed including the positive being we...
                                19-07-2019, 20:30 PM
                              Working...
                              X