TENANTS ENCOURAGED TO NEGOTIATE WITH LANDLORDS – so said The Times last Sunday (Money Section). The article gave a carefully balanced picture, highlighting the benefits to both landlord and tenant. But it failed to mention the pitfalls.

It illustrated how tenants could get better deals with landlords of property in poor decorative order, or condition, by offering to undertake decorations and repairs themselves in exchange for a lower rent. The theory sounds fair, but I would discourage landlords from letting tenants undertake their own redecoration unless the tenants would sign a contract for 5 years or more. We’ve been asked to find new tenants for properties where the previous tenants undertook their own decorating, with the landlords consent, only to find the most atrocious of standards of workmanship, and decorative tastes! Paint splashed on stripped wood doors and skirtings, on lampshades and light switches, and where ‘feature’ walls haven’t been ‘cut-in’ correctly at corners and ceilings, the different colours having a line like a dogs hind leg.

Deep colours for a feature wall may appeal to some people, but a deep red washable paint can be a nightmare to overpaint and return to magnolia or some other neutral colour. The cost of professionally putting these things right can run into many £100’s and delay a relet by weeks or even months.

Having a tenant undertake repairs sounds cost effective, but who would be responsible where a repair to a stair nosing under a carpet was inadequate and the next tenant fell down the stairs and broke a leg – or worse? The article referred to tenants taking responsibility to replace a plug, but who’s to say they will wire the plug correctly? An inadequate earthing or reversed polarity on a plug can be extremely dangerous. Would the landlord know about this when the next change of tenant takes place? I suspect not. Annual PAT testing is mandatory (although I value properties every week where I can see the PAT test label is 2 or 3 years old). Most landlords, or their managing agents, undertake periodic electric safety checks but as these are anything up to 5 years apart, who knows what an enthusiastic DIY tenant may have done in the meantime. Our Property Inspector occasionally discovers sockets with a 6+gang trailing socket fully loaded with TV’s, PC’s, monitors, printers and even on one occasion a kettle and a pair of curling tongs! Even with a careful choice of what to switch on, and when, this is clearly an accident waiting to happen.

The article suggested tenants should negotiate rents down by offering longer notice periods, giving the landlord more time to find a new tenant. Theoretically, a sound idea, but most tenants don’t want to be tied into contracts where they have to give 3, 4 or more months notice to leave. A vast number of tenants chose rented property for its flexibility – especially where flat/house sharing with friends or where their employment may necessitate moving from place to place. A longer notice period for many agents, at the moment, isn’t desirable. Rental demand is very strong. The landlords challenge is to find good tenants who will look after the property, not annoy the neighbours with all-night parties, cut the grass and clean the windows regularly, and pay the rent on time.

The Times journalist quite rightly said that such tenants were in a strong position to re-negotiate a new contract with little or no rent increase. I concur. These are the tenants we, as managing agents, cherish. There’s constant media talk of landlords wanting to kick tenants out, but this is far from the reality. Landlords buy investment property to generate a regular income, or at least ensure the rent pays the mortgage, so they can benefit from capital growth. The last thing they want is an empty property, especially as they then have to pay any mortgage and the Council Tax out of their savings. But we are the first to encourage a change of tenants in a property where the tenant is not looking after the property, they’re in breach of covenant in some respect (nuisance, pets, damage, etc) or where they are constantly in arrears with the rent. Good management on our part necessitates taking control of such a ‘problem’ on behalf of the landlord and engineering a new tenancy with a good tenant. Such work on our part is not desired – why would we want to create work for ourselves when we can get paid a regular, modest, commercial fee with good tenants who cause us little, if any problems?

There are a small number of letting agents who can make a significant sum of money from tenant changes. Most estate agents in Leeds, especially the majority of those members of the Leeds Estate Agents, Surveyors and Valuers Association, charge letting fees that simply cover their costs for advertising and setting up a new tenancy. Tenants can differentiate agents by what they charge in Tenants Fees – those who charge the most are likely to seek a tenant change sooner rather than later – although if the Tenant Fee ban is implemented this means of identification will disappear. That said, most landlords will not agree to tenants being ‘forced out’ for the agent’s benefit and at the end of the day the letting agent must act on their client’s instructions.

Rental values are determined by supply and demand. If we believe rents are increasing it is beholden upon us, as the agent for the landlord (the client), to advise them accordingly. But even if rents have risen £50 pcm over the year on a £700 pcm property, would the landlord want to run the risk of losing a perfectly good, reliable, tenant? The agent’s re-letting fee would absorb the bulk of the rent increase, and they would be running the risk of the property being empty for a month, along with the liability for the Council Tax for a month. It is ludicrous to suggest this would happen with a good tenant.

Landlords and agents are constantly being portrayed as the ‘bad guys’, trying to take advantage of tenants (the ‘good guys’?). Landlords and agents are not usually philanthropists, I accept, but neither are the majority out to hurt or fleece anyone. There is always room for some negotiation when it comes to property deals (sale or rentals) but landlords need to be wary over future liabilities and responsibilities, and where compromise are agreed the parties should have been made ware of any potential pitfalls.

It is the season of goodwill, and I hope my aforementioned comments are taken in the positive spirit (I prefer Sauvignon Blanc to be honest) with which it is intended.

On behalf of Julie, Hayley, myself, Michael Davies and all the team at Moores, may I wish all our clients and customers a very Merry Christmas/holiday period and a happy, healthy and prosperous New Year.