It's good to talk and it could just keep you out of court

Buy-to-let may seem like a sound way to make money and there’s certainly a lot of us getting involved with £38.4 billion buy-to-let loans handed out during 2006.

Buy-to-let now represents 9% of the value of all mortgage balances, so it appears that the market is still booming with fledgling landlords starting up every day. But it’s not all rosy in your rented garden. What happens when your tenant turns into a bad tenant? How do you deal with unpaid rental, trashed property and ultimately unpaid mortgage repayments?

The Property Investor Show which comes to the NEC Birmingham 23rd – 25th March is the showcase for over 100 exhibitors from across the industry. One such contributor is Paul Shamplina, co-founder of Landlord Action – an original tenant eviction company which provides landlords with an efficient service at an affordable pre –set price. The Landlord Action three step plan has been highlighted on ITV’s Tenants from Hell and BBC1’s War at the Door. Paul will be conducting a seminar on Friday and Saturday at the show entitled ‘How to Evict a Bad Tenant.’

“We started the company in 1998, when my co-founder Jonathan Chippeck was having problems with his own tenants not paying their rent. He discovered that solicitors couldn’t give him a timeframe or idea of cost and he thought that there must be a better way,” commented Paul. “The biggest mistake that many landlords make is to rush into a tenancy, not working methodically through the paperwork or checking tenants out thoroughly. Surprisingly, landlords can also leave it too long before putting any procedures in place for recovery of unpaid rent. You shouldn’t go any longer than two months before beginning proceedings.”

Paul’s best advice is communication with your tenant, “whilst keeping a constant dialogue going you will always be aware of the tenants’ situation and this should highlight any possible problems.” Once you have met with your tenant you need to conduct all the background checks; checking up with ex-landlords, employment details, and obtaining three months of bank statements. Also, try to obtain copies of passports, driving licences and their national insurance number – if a tenant does do a disappearing act, its much easier to find them with these details.

One Midlands landlord with 22 properties in Erdington was pleased to have found Landlord Action, “over the ten years I have been a landlord I have used Paul three times in different circumstances. The fact there is a specialist firm out there who can move swiftly and efficiently is invaluable. The most important aspect at all times is ensuring that your mortgage payments are covered, when this stops you need to move quickly to protect your investment,” explains Austin Gale, a Sutton Coldfield based landlord. “There are many reasons why a tenant stops paying and sometimes it can be difficult getting to the truth, we usually give them about six weeks after defaulting and then talk to them to ascertain the problem. Unfortunately people bury their head in the sand and tell you everything is OK and that they will pay and then they don’t deliver, it's then that you need someone with a specialist knowledge of the procedure, like Landlord Action, to take over.” He comments that to bring a property back up to standard after an eviction can cost between £800 and £1,000.

Austin errs on the side of caution now and restricts incoming tenants to young professionals, whilst also ensuring careful checks are made with employers.

The Landlord Action system is a quick three step programme which has a fixed price at each stage. The first step is the serving of the legal notice (within 48 hours of appointment). In many cases, this alone is enough to make the tenant pay up – it costs £115 including VAT. If the tenant doesn’t pay up within 14 days they then issue court proceedings and an appearance before a judge to obtain a possession order. This costs £565 including a barrister’s fee. If the tenant ignores the court order and refuses to leave, Landlord Action arranges for bailiffs to remove the tenant. This costs £198 plus VAT.

For free advice with problem tenants visit Paul on stand 27. The Property Investor Show is on March 23rd – 25th at the NEC. Entry is free but you must register online at thepropertyinvestorshow.co.uk/birmingham seminars are £5.00 per place.