The accidental landlord: why owners should maintain a professional relationship with tenants

A landlord I know is bitterly regretting becoming friendly with her tenant after the relationship turned sour. The tenant was already renting the flat in south-east London when my acquaintance bought it from another landlord several years ago.

The pair met up and they got along well. “I thought she was a nice lady, so I let her stay and I didn’t put up the rent even though she was paying a lot less than the flat was worth,” the landlord told me.

Over the following years, she didn’t increase the rent because, as she puts it, she didn’t want the tenant to think she was a typical “London landlord”.

“The flat was my pension. I had invested for the capital growth and didn’t expect to make a lot of money from the rent,” she said. As long as the rent was covering her costs, she was happy.

Fast-forward to last year — her business took a dip and she needed some money, so she put the flat on the market. She was hoping to sell to another landlord who would be happy to let her tenant stay.

However, the low rent put off other investors. The only offer was from a first-time buyer who wanted vacant possession. The landlord accepted the offer and gave her tenant notice.

However, the tenant refused to budge. She ignored the Section 21 notice to quit, forcing the landlord to go to court to seek a possession order.

It was then discovered that the letting agent who had found the tenant for the previous landlord hadn’t protected her deposit. As you can’t evict a tenant if you are holding an unprotected deposit, proceedings had to be halted. The agent had to return the deposit to the tenant before a new Section 21 notice could be issued, which delayed the court hearing by 10 weeks.

At a subsequent hearing, the tenant was ordered to leave within two weeks, but she still refused to go. It seems the local council, which was paying her rent, had advised her to stay, saying it wouldn’t rehouse her if she left as she would be deemed to have made herself homeless — even though she had been issued with a court order to leave.

The landlord now has to go back to court to apply for the tenant to be evicted by bailiffs, which will take another four to six weeks.

It has been stressful for the landlord and expensive for both parties. The landlord has spent around £1,000 in legal fees and the tenant has had to pay court costs of £300.

“Basically, I made the mistake of getting too friendly with her,” my acquaintance told me. “Once I’d got to know her I didn’t feel I could increase the rent, but I shot myself in the foot because when I came to sell the flat, the figures didn’t stack up for other investors. I should have increased the rent by a small amount every year, then another landlord might have bought the flat and let the tenant stay.”

She also felt let down by the agent who had failed to protect the deposit. “It was so unprofessional of them and the delay to the court hearing cost me money. Now I don’t have a deposit and I’m worried the tenant will leave the property in a mess, but the agent is refusing to help.”

She admits the flat has been a good investment, but says she was wrong to befriend the tenant. Sad — but true.