Not even the best tenants come with a guarantee

No matter how rigorously you vet your tenants, how carefully you word your contract, how many “t”s you cross and “i”s you dot, sometimes, occasionally, things will blow up in your face.

A couple I know were very careful when choosing their first tenants for a large rental flat they had spent many months of blood, sweat and tears renovating. They gave the letting agent a list of wants: a couple, professionals, excellent references — and a list of no-nos — children, pets, sharers.

The letting agent — who, my friends said, was very good — actually listened and found them the perfect pair: a married, child-free, working couple. They came with glowing references, passed all the credit checks and paid a six-week deposit plus a month’s rent in advance.

So thrilled were my friends with their hand-picked tenants that they agreed to the couple’s request to fully furnish the flat, even though they had originally intended to let it bare. This involved them spending a long, arduous weekend picking a lorry-load of flat-packed furniture off the shelves at Ikea and another long weekend assembling it all.

Six weeks after moving in, one of the tenants called my friends to say he had “terrible news”. He had lost his job. Worse, as he’d only been with his firm for a few weeks, he was still on probation and wasn’t entitled to any severance pay. He could no longer afford the rent.

It got worse. He then admitted that he and his wife had omitted to give my friends some vital information when they moved in. They were about to have a baby. My friends were faced with a nightmare scenario. They couldn’t afford to let the tenants stay — they had a mortgage to pay, for goodness sake — but how could they turf a pregnant woman out of her home?

Leaving aside the moral argument of whether you should evict tenants who fall on hard times, it isn’t a simple case of saying “no rent, no room” and chucking them out, not if they’ve signed a contract. You have to wait until they’re eight weeks in arrears before you can serve them with a notice to quit, and if they refuse to go you have to seek a court order to have them evicted. If they still refuse to budge, oh man, you have to apply to a county court to arrange to send bailiffs round.

Now, I don’t know any landlord who could stomach seeing a pregnant woman being physically ejected from a property. Fortunately, my friends’ tenants agreed to leave without a fuss. The letting agent found new tenants to move in almost immediately and the additional costs — the new rental agreement, additional administration fees and so forth — were covered by the couple’s deposit.

So I suppose the care my friends took to choose decent tenants paid off in the end, as a less honourable couple could have stayed on in the flat, running up arrears.

You have to be just as careful when choosing a letting agent, as landlords who used Canterbury-based Joseph Newman found out when it suddenly shut up shop last month, holding on to about £350,000 in deposits. The agent, one of the city’s biggest, had not protected the deposits, so the landlords will probably be obliged to refund tenants out of their own pockets.

If you do use a letting agent, pick one that has client money protection insurance — all members of the Association of Residential Lettings Agents (ARLA) do, apparently — or better still, get registered with a tenancy deposit scheme and look after your tenants’ deposits yourself.