LANDLORD Owes His Tenants £23,000!
Hey landlords – how much do you owe your tenants? Could it be… as much as £23,000?
Time to expand your portfolio? Let us know – we know experts that can help guide you through the process and find you the right deal.
Did you know that failures on your part, as a landlord, could end up with YOU owing your tenant money?
What happened?
Back in December 2022, 81-year-old Eric Moon’s tenants made a complaint to District Council’s environmental health team, regarding the poor condition of the property they were renting from Mr Moon in Pelwood Road, East Sussex.
Now, we’ve talked about poor properties in the past, but this one was really racking up the hazards with a total of 3 severe Category 1 hazards and seven Category 2 hazards.
These included:
- Collapsing ceilings
- Dangerous electrical installations
- Poor stair and step safety
- Damp
- Mould
- General disrepair
- No heating – internal temperatures reaching a maximum of 13 degrees
We can all agree that this is no way for a tenant to live and the responsibility falls to the landlord – Mr Moon.
Mr Moon was served improvement notices in January 2023 – as you can imagine, these required extensive repair works to be undertaken to get the property into a liveable and safe condition for rental. You won’t be shocked to hear that Mr Moon did not comply with these notices.
We don’t know why he didn’t comply with the notices – it may have been a lack of care on his part, but it may also have been because he was unable to do so, either due to infirmity or cost.
Regardless, Mr Moon was found guilty at Hastings Magistrates Court of three counts of non-compliance with Improvement Notices served under the Housing Act 2004, resulting in a huge fine of £20,000, plus a surcharge of £2,000 and costs of £1,649.
The magistrates called this a matter of ‘high harm and high culpability’ and a spokesperson for Rother council said:
The current housing crisis is significantly impacting the private rented sector, but it is important that habitable living conditions are maintained. This was an exceptional case where there was significant risk to the health of the tenants, and of the chance of serious injury, given the lack of maintenance at the property.
What can you learn?
So what can you learn from this particular situation?
Well, let’s assume that Mr Moon was unable to comply with the improvement notices, for whatever reason. This is something that could affect many landlords, for a number of reasons.
- You may live abroad and be unable to act quickly and easily in response to a problem, particularly if there is a significant time difference
- You may be older or suffering ill health and overwhelmed by the necessities of landlording
- You may have a busy full time job or family life that makes it difficult to keep up
However, as Rother Council said:
We encourage landlords to listen to tenants’ concerns and take action to reduce hazards at the properties that they rent.
As a landlord, you are legally obligated to ensure that your property is safe and habitable – or, like Mr Moon, you face significant fines. So what can you do if it’s all too much to keep on top of?
- Be honest with yourself. If you are self-managing, take a step back and be really honest with yourself about how you’re coping. Are you aware of changes in the law? Are you letting anything slide? If you find that you are overwhelmed and your business is suffering because of it, then you need to take action.
- Outsource the work. Letting agents exist for a reason – being a landlord takes time and dedication that not all of us have space for. Outsourcing the management to a letting agent will cost you, but it can also save you from missing crucial details that could result in huge fines.
- Keep an eye on your portfolio. Even if you outsource the management of your property portfolio, you are still the landlord – the buck will always stop with you. Make sure you are still aware of when certifications and licences expire, so that you can check with the agent to ensure they’re sorting all that out for you.
- Monitor your budget. Make sure that you are thoroughly aware of your income and expenses regarding your property. We always recommend that you try to save a portion of the income towards any future expenses that might arise. So, if there is any damage to your property that requires fixing, you have the money to sort it out before it gets any worse.
- Make sure you’re insured. Insurance can really take a load off your plate. While there will be times that you will need to dip into your own pocket to fix something, larger issues can be covered by insurance. As a landlord you will need to have buildings insurance, but it’s also worth investing in home and emergency insurance, as well as contents if you’re renting the property furnished. It could save you quite a bit should there be an emergency!
What would you have done in Mr Moon’s position? How do you prevent your property’s even reaching such a state?
