Renting your property to someone you already know, like and trust can seem like a great idea, surely if you already know the person then there’s nothing to worry about? Sadly that’s not the case and any tenancy can go bad. By renting to someone you know you’re actually more likely to cut corners than if you rent to a stranger, and in part it’s down to feeling awkward
Imagine this
you’re on a night out with a friend when he tells you that he and his partner are having a baby! It’s great news except they need to find a new home as the flat they’re renting now is on the second floor – not ideal with a baby.
You congratulate him and tease him about the sleepless nights that are heading his way, then it hits you – your tenant is moving out, what perfect timing! ‘Why don’t you move into our rental?’ You say excitedly ‘It’ll be empty in a couple of months?’ More toasting! You’ve known each other for years, he’s like a brother to you and your wives get on well too so what could possibly go wrong???
Here’s where the awkwardness kicks in, and these are the top three mistakes I’ve seen when mixing business and friendship:
Mounting arrears
There are landlords who manage their own properties but still use an agent to collect the rent, because they feel that asking their tenant why the rent is late could be awkward or lead to confrontation. How much more awkward is it when the tenant is a friend? And what happens when your friend tells you of the terrible time they’re having? I spoke to a landlord last year who had this happen to him, his friend lost his job and built up some big debts, the landlord ended up going 9 months without any rent before exploding and telling his friend to leave.
Missing paperwork
Who needs paperwork when you’re letting to a friend? It would be awkward asking them to sign things and might look like you don’t trust them, no you don’t need that you’re friends. So you hand over your keys with little more than a gentleman’s handshake. But what do you do if the worst happens and you need your property back but they don’t want to leave? How do you serve notice without a tenancy agreement? Yep you’re going to need a solicitor and you’re going to court. And, if you didn’t give your friend the deregulation documents when they moved in or you can’t prove that you did, then that’s another level………..
Missed checks
Again, it’s awkward. How can you ask your friend when it’ll be convenient to do a property inspection, turn up with a clipboard and make notes of any damages? And what happens with required checks like gas safety and the upcoming electrical inspections? One landlord I know didn’t visit his property for seven years, in his mind he had given his friend a roof over his head at a very cheap price and so it was up to his friend to just get on with it and look after his home. When he got his house back he realised his friend hadn’t looked after it at all.
Take a pause
So next time you’re thinking of letting to a friend consider whether you would find these situations awkward. If you would, then for the sake of your relationship either employ an agent or keep your keys in your pocket.
