Problem tenants can arise in both commercial and residential property scenarios, and there is little that you can do to prevent them from occurring altogether.
If you are thinking of buying a property that you will lease to others, whether commercial or residential, you should make sure that all enquiries and questions are asked about the relationship with the tenant, whether they have paid their rent on time, and whether the outgoing landlord has ever had to raise any issues with them concerning breaches of the lease terms. That should give you a good insight as to whether or not you are taking on a problem tenant.
Bear in mind that even if one party has had an issue with the other, that doesn’t necessarily mean that you, as the new party to the relationship, will have similar problems. Sometimes, personalities can just clash.
What is a problem tenant?
This can be fairly subjective, but in broad terms, a problem tenant might be someone who is late in paying their rent and constantly has to be chased or who does not adhere to the terms of their tenancy agreement or lease and is constantly being reminded by the landlord that they need to behave differently.
How can you spot a problem tenant from the outset?
In the residential context, you should obtain references from previous landlords or managing agents, although typically, tenants only select third parties to give positive references. If you are concerned about a tenant and their ability to pay rent, you may want to instruct a solicitor or third party to undertake some background checks on the tenant in terms of whether or not they have ever been bankrupt or insolvent or entered into an IVA and whether they have got any County Court Judgments registered against them and whether they are satisfied or unsatisfied.
Aside from financial checks, it can be very difficult to ascertain before any tenancy commences whether you have a tenant who will raise issues constantly and be problematic.
Legal remedies for landlords
Depending on the context and whether it is a commercial or residential lease, a landlord might have various remedies in the event that the tenant does not abide by the terms of the lease.
For example, in the commercial property lease context, a landlord may be able to bring the lease to an early end or serve a statutory demand to force any arrears to be paid within 21 days or threaten Court proceedings if a tenant fails to pay their rent. For any other breach of a commercial property lease, a landlord should take legal advice on whether or not the issue with the tenant is a breach of the lease terms and whether or not a Section 146 notice can be served to force the tenant to comply.
In the residential context, a Section 8 notice may be served if the tenant is late in paying rent, and there may be other grounds available to a landlord to bring the lease to an early end if the tenant is misbehaving.
It should be noted that regaining possession from a tenant, problem tenant or otherwise, will be more limited once the new Renters Rights Bill has been introduced.
This information is for guidance purposes only and does not constitute legal advice. We recommend you seek legal advice before acting on any information given.
