Do Older Landlords and Tenants Face Special Problems?

Increasing numbers of retired people are investing in buy-to-let property, whilst other pensioners are selling their homes and moving into rented housing.

Are these sensible choices or potentially risky moves for older landlords and tenants?

Pensioners invest in buy-to-let

A survey published by the Office of National Statistics about investment habits has revealed that investing in property is seen, by increasing numbers of people, as a safe way to save for the future and get additional income in retirement.

“42% think buy-to-let is one of the best ways to make money” 

According to the ONS 42% of individuals surveyed, gave buy-to-let as the method most likely to ‘make the most of your money’ compared with 32% surveyed in the period July 2008 – June 2010.

Financial experts are predicting that new pension rules allowing savers to access all of their pension funds from the age of 55 could trigger more older people to invest in buy-to-let property.

Selling up and moving to rented property

While some pensioners are investing in buy-to-let, increasing numbers of other pensioners are choosing to sell their homes and are moving into rented properties.

With an ageing population, it is inevitable that the number of retired people involved in the private rented sector as landlords and tenants is set to keep on rising.

The Telegraph newspaper reported that one in five homes in the UK are owned by private landlords.  According to The Telegraph report, that figure is likely to rise by another million in the next five years.

Should tenants worry about pensioner landlords?

Living in a property owned by someone else always has the potential for difficulties but there can be special issues that arise from having an older landlord.

The most obvious situations that could lead to difficulty for a tenant are if the landlord should die or become seriously ill or mentally impaired for example through dementia or a stroke.

If a landlord’s ability to make decisions becomes impaired or the landlord dies it could have a significant effect on the tenant.

Here are some of the questions that would need to be answered:

• who will authorise repairs?
• will the property have to be sold?
• who will inherit the property?
• who should the rent be paid to?
• if there’s a letting agent will they continue to be involved?
• if there’s an on-going dispute with the landlord how will that be resolved?
• who will have the right to serve a Section 21 notice?

Landlords have a duty to carry out due diligence checks on tenants before allowing them to move in but there’s no reason why tenants shouldn’t also carry out checks and raise enquiries with a potential landlord.

Before you move in ask the landlord or letting agent if they have contingencies in place in case the landlord should develop a long-term illness or die during the tenancy.

And it’s not just tenants who need to think about these issues…

Anyone considering buying property to generate retirement income needs to think carefully about how they are going to manage the responsibilities of being a landlord in the longer term as they get older.

KYT – Know Your Tenant

Has your tenant started behaving in an unusual way? Are they acting out of character – repeatedly losing keys or doing things that disturb the neighbours? If the tenant is elderly the underlying cause could be related to a form of dementia or other brain impairment.

• Do you know what you would do if one of your tenants developed dementia or a serious disability?
• Would you be able to recognise the signs and know how to act appropriately?

It’s important to be aware of the possibility that a tenant may develop confusion or lack mental capacity. Landlords need to have plans in place to deal with the situation should it arise.

If you have experienced problems as an older landlord or tenant let us know – leave a comment.

Our Guide for Older Landlords and Tenants

We’re busy producing a special guide to help older landlords and tenants.

♦ Tenants – What rights do you have if your landlord dies or suffers dementia – we answer queries on renting from   older property owners

♦ Landlords – Managing elderly tenants can present some challenges. Find out if you’re prepared.

Watch out for our new guide coming soon – part of our BE My Own Lawyer online service.

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About the author: Rosamund Evans is a solicitor specialising in age and disability issues. Read more

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Image by Jeroen van Oostrom courtesy of Freedigitalphotos.net