Absconding tenants are an inevitable fact for any long-term landlord. The chances are that if you are planning to invest in property over the long term you will be faced with this situation. This inevitability makes it essential that you, as a landlord, equip yourself to deal with this situation. This article aims to explain what an absconding tenant is; how to deal with this situation and how to be proactive and protect yourself and minimise your risk.
Key points:
- Absconding tenants are an inevitable part of being a landlord.
- All tenants, including absconding tenants must be evicted lawfully.
- Landlords can be sent to jail if tenants are not evicted legally.
- Correct vetting of tenants and correct systems can significantly reduce the risk of experiencing an absconding tenant.
What is an absconding tenant?
An absconding tenant is a tenant who has breached the terms of their Assured Shorthold Tenancy (AST) by leaving the property without serving notice of their intent to leave. The requirements on the tenant in terms of the notice they must serve their landlord are outlined in the clauses of all ASTs. Traditionally, these are that a tenant can not leave the property during the term of their AST without either:
- Arranging for a tenant to replace them; or
- Paying the remainder of the rent.
The issue of absconding tenants always raises the issue of the professional tenant. We define a professional tenant as someone who openly breaks the law by providing false information to obtain a tenancy with the intention not to pay rent on the property. A feature of a professional tenant is the high frequency at which they change address. Due to the way in which professional tenants operate, identifying them is difficult and makes it essential that as a landlord you vet your tenants extremely carefully.
Theft by an absconding tenant
If a tenant has absconded or, you suspect a tenant has absconded and items provided by the landlord have been stolen, it essential you create a record of what has been taken. Part of this record will be the inventory – you should have agreed with the tenant at the start of the tenancy. A second and equally important part of creating a record of the theft is reporting it to the police and receiving the all important crime number. Unfortunately, it is unlikely that buy-to-let contents insurance will cover the costs of these loses because it is unlikely there will be signs of forced entry.
What to do when a tenant has absconded
It is essential that you do not break the law by evicting a tenant without a court order, or in someway interfere with the tenants right to quiet enjoyment of the property . This means that you should work quickly to determine whether the tenant has truly absconded, has simply missed a rent payment, or is on holiday. Once it has been confirmed the tenant has absconded, act promptly and carefully to end the tenancy in a lawful way. Figure 1 details a course of actions to follow; it will establish if the tenant has absconded and what to do to recover possession of the property and any possible losses caused by the tenant.
Prior to eviction:
- Call the tenant and any guarantor to try to establish whether the tenant has truly absconded.
- Notify the police if there has been a theft from the property – ensure you receive the all important crime reference number.
- Notify your insurance company to determine whether it is possible to make a claim against your contents insurance.
- Follow the legally required steps to end the tenancy by serving notice on your tenant, using section 21 and section 8.
After eviction:
- Change the locks and alarm codes.
- Begin to trace the tenant.
- Take tenant to small claims court to recover any outstanding debts (note this should be assessed using a cost-benefit analysis to determine the worth of pursuing this action).
Figure 1:Procedure for dealing with an absconded tenant
Lawfully ending the tenancy
The lawful way of ending an AST is to serve the tenant a section 21 and/or section 8 notice detailing the grounds on which you seek possession. There is a prescribed procedure to end an AST which must be followed exactly, in order for the landlord to successfully regain possession of the property. As this article focuses on absconding tenants, it will not outline the detail of the eviction process.
Once the eviction has been granted by the county court it is recommended the locks and alarm codes for the property are immediately changed and the property is prepared for let.
Recovering any financial loses
If you have sustained financial loses, you may want to pursue these through the county court. A county court has the power to order a County Court Judgement (CCJ) against the tenant. A CCJ makes getting credit and future tenancies difficult for the tenant. In addition, an attachment can be made on the former tenants earnings, whereby, a set amount is deducted directly from the earnings of the tenant, until their debt is repaid. However, there are costs involved in pursuing this course of action and the likelihood of success must be considered against these costs. For example, if the costs of gaining an attachment to the tenant’s earnings was £300 and the tenant repaid the arears plus the costs at ten pounds per month, it would take 30 months (2 ¼ years) just to pay off the costs of gaining the attachments to earnings.
In addition to pursuing the tenant through the county court, it is possible to hire a company to trace the tenant. Such companies often offer a recovery service, whereby they trace the tenant and recovery your loses, on a no win, no fee basis. There is also the possibility of selling the landlord’s debt to a debt recovery specialist, however, it is unlikely the landlord will get more than 30 to 40 pence for every pound of debt the tenant owes. Again, these measures need to be critically assessed to determine whether their cost in terms of time and money are acceptable.
Protecting yourself from absconding tenants
It is almost impossible to protect yourself from absconding tenants, however, there are precautions that you can take and systems you can adopt which mean the risk of you experiencing this situation are reduced.
These actions come at the very start of the tenancy and hinge on the way tenants are vetted and the documentation used to rent a property. It is recommended all landlords use a tenant application form and insist on seeing, not only two forms of ID but bank statements and previous utility bills. Always ask for a guarantor and vet them using the same strict vetting procedures you would a tenant. In addition, use a detailed inventory which is supplemented by photographic and preferably video evidence incase there are any instances of theft. These procedures will minimise the risk of absconding tenants and help ensure a high quality tenant.
Summary
In summary, being a long term landlord means there is a high chance you will experience an absconding tenant. However, with the correct systems and vetting procedures when you start a tenancy and following the correct procedure when ending the tenancy the disruption will be minimised.
