Bad tenant- insurance or other protective steps?

[westy]

Hi
Our tenant moved out the 13th day of the possession order we were granted. She left her key with her daughter that lives a few doors away. She left most of her 'furniture' and a few toys and clothes belonging to her grandchildren. We have throw most of the items in the skips and left the rest in the garden for the next few days and told the son in law to take what he wants. I have phoned all the utilities etc and found out that she has changed most of the supplies 3 times in the 5 months she's been there. We have had a card pushed through the door today from a loan company asking her to contact them and have also found numerous catalogues which we're sure will be sending bills soon. She owes us £1720 which includes court costs. She told us she had lost her job but a neighbour has informed us she works nights in a nursing home a few doors away. Her daughter says she isn't gone back to her but i think she has and will be keeping an eye out for her there this week. I don't think we'll get the money off her but the satisfaction of a CCJ against her would be something.

We don't want to go through all this again and are not going to rush into renting it straight away, as there are a few things we want to check out first.

We set a bond at £375 which is the same as the monthly payments but looking at the TDS posts on this site we are wondering if it is worth taking as that doesn't cover a lot of damage anyway (if there was to be any). If we asked for 2 months rent in advance, would this be classed as a deposit as the tenant wouldn't get it back as it would just be rent in advance?

The other thing is getting them to pay for the credit/reference check and a rental insurance (could we tell them that we are just paying for a check as someone pointed out to us,if we tell them it's for an insurance they may think they can get away with paying the rent as the insurance will cover it.

Has anyone used any of these insurances and do they work or are there clauses which catch you out when you go to claim.

any advise would be gratefully accepted

[jeffrey]

Best not to disclose existence of insurance; some policies void cover if policyholder discloses to potential source of a claim.

[islandgirl]

As I understand it 2 months rent in advance would class as a deposit and would have to be paid into the scheme.
Re credit checks. When you show a prospective tenant round give them a copy of the Tenantverify £30.55 check form. Tell them to fill it in and return it if interested. In my experience 75% run a mile! Obviously these are the ones with CCJs/poor history so you certainly don't want them as tenants!
Good potential tenants will fill in the form and hand over their money - it costs them a lot less than it would doing it through an agency.

[westy]

thanks both

i agree with the tenantverify form idea, at least we can weed out the bad ones in the beginning.Do you mean hand over the money to pay for the checks if we decide on those? If it's a couple do you have to have both checked if the tenancy is in just one name?

Would the two months rent definately be classed as a deposit as they wouldn't get it back would they, as after the six months they would have to give a months notice, which they would have paid for in advance.

:confused:

[islandgirl]

Tenantverify - if you show someone round and you think they are OK, tell them that you only let after performing credit checks. Give them the form and tell them to return it asap with a cheque or cash £30.55. The cheque has to be paid to you as you do the tenantverify stuff online.
The ones you think are OK sometimes still disappear when the read the stuff you require them to fill in on the form!
Re - rent in advance. If this was a way round the law everyone would do it and noone would pay in deposits - anyone else any comments?

[westy]

thanks for that, someone has told me they put theirs down as -first months rental being £700 and £350 per month there after, should they have done that or is that wrong too?

[Bel]

Regarding rent in advance; don't some agents/LL's ask for the whole of the fixed term in advance? Especially if the tenant has poor credit rating. This definately does not mean it is a deposit; so why should paying 2 months in advance be looked on to be a deposit?

The tenant will use up the two months rent over the final 2 months of the tenancy, so its not a deposit, IMO.

[westy]

that's what i think, does anyone know here i can find this out?

[Bel]

You might find this thread of interest

http://www.landlordzone.co.uk/forums/showthread.php?t=5468&highlight=deposit+idea

If in doubt, get legal advice.

[westy]

apparently it states on the RLA website that taking 2 months rent in advance doesn't class as a deposit as it isn't refundable. I haven't had chance to look this up yet.

An aquaintence of mine has informed me that they are going to take two months rent in advance and get the tenant to pay for checks and also charge an admin fee to cover everything. If the tenants are genuinely keen they will go ahead with this

His houses are unfurnished so he thinks the deposit is a waste of time. He is also doing the rental insurance ,

Does anyone agree with his way or are there flaws with it

[DianeB]

A) If you were to take a deposit and put it into the custodial scheme, there would be no cost to yourself but you would have the chance of recouping any possible damage costs at the end of a tenancy.

B) If you were to take 2 months rent up front, your tenant would not pay the last two months of their tenancy and possibly would not pay out if there was any damage to your property.

Surely Option A would be better:confused:

Also, if you take out insurance and have already received months 5 and 6 in advance, would the insurance pay out?

[westy]

Thanks for the advice on the Tenantverify forms islandgirl, you were right . Out of 6 potential tenants only one is prepared to fill in the form and that is the pensioner (with the help of her daughter),so it does work. Does anyone know how long the results of the reference/credit checks take to come back.