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You could advise your tenant to seek assistance from bodies like the Citizens Advice Bureau or the local authority in connection with housing benefit which can still be paid directly into your account in specific circumstances.
If you have reached some form of agreement, it’s always wise to put that in writing. This may include accepting smaller rent payments with increasing additional amounts to pay off the arrears over a period of weeks or months, or the agreement to pay a lump sum at some future date to make up arrears.
If your tenant is unable or unwilling to reach an agreement for payment, you may have no alternative but to seek possession of the property in order to get a paying tenant in to minimise your losses.
If your tenant owes rent and is still in the property, we can assist in serving a Section 8 Notice for possession.
Drafting this notice requires careful attention to detail, including checking that all the correct details are included and that it is served correctly in accordance with the regulations.
If the tenant doesn't pay by the time the Notice expires, proceedings can be issued in court to get a possession order. If your tenant still doesn't leave by the date set by the court, its officials can then be called to remove the tenant.
It is unlikely that landlords will recover all outstanding losses in rent arrears cases. Debt recovery can be expensive and time consuming, but it is sometimes cost effective to do-it-yourself using the Small Claims Court. The best solution of course would be to avoid arrears in the first place.
There are steps you can take to minimise the risk of rent arrears although it is never possible to eliminate that risk completely.
Having a comprehensive Tenant’s Application Form (Tenancy Proposal Form) is crucial. This should contain the tenant’s personal details, employment history and contact information. It also provides valuable evidence for using Ground 17 under the Housing Act 1988 if a false statement is knowingly made by the tenant or someone acting on his behalf.
Always screen potential tenants and do a credit check. It is not an absolute guarantee against arrears but a basic check is quick and quite inexpensive. Insist on the rent being paid by standing order. These are easy for the tenant to set up and have several advantages besides saving time. They are regular, there’s no anxious waiting for cheques coming through the post and you know straight away if there’s a problem.
If a payment fails to materialise it means one of two things: the tenant has ordered the bank to stop the payment or there are no funds. In either case, you can act immediately if required.
The Housing Act 1988 as amended by the Housing Act 1996 lays down certain grounds under which a landlord may apply to court for possession of a residential property. These grounds for possession apply to most tenancies entered into after 15 January 1989.
If your tenant is on an assured shorthold tenancy of six months, it may well be possible, depending on how long the tenant has been in residence, to wait until the mandatory Section 21 possession notice can be served.
The so-called Accelerated Possession Procedure cannot be used in rent arrears cases and therefore if you are not able to use the mandatory shorthold Section 21 possession procedure you will have to fall back on the various grounds for possession mid-tenancy
A Section 8 Notice, also referred to as a Section 8 Notice to Quit or Section 8 Possession Notice, is used to terminate an assured shorthold tenancy before the fixed term has ended using the mandatory Ground 8. This grants possession where the arrears exceed eight weeks if the rent is paid weekly or fortnightly, two months if paid monthly, one full quarter if paid quarterly or three months if paid yearly.
There are other non-mandatory grounds, known as discretionary grounds, which can also be invoked, but with less certainty of outcome. The rules relating to service of notices and the completion of the notice are extremely complicated. Access Legal can complete and serve the notice for you at a fixed fee.
Most tenants, when reminded about a missed payment, will respond quickly and remedy the situation. However, if the arrears persist, you probably have a more serious problem.
It can take a long time to regain possession through the courts, often as long as six months, and sometimes difficult tenants can delay matters even further. It’s imperative, if you decide to go for possession of the property to minimise your losses as much as possible, that you act quickly.
Some tenants may just refuse to go or to co-operate with you in any way. In these cases the sooner you take action the better. However, if the tenants expect to be re-housed by the local authority, there could be no alternative but to ‘go legal’ immediately. Local authorities will not normally re-house tenants who have ‘voluntarily’ made themselves homeless.
Whatever you do though, never ever be tempted to harass or in any other way interfere with the tenant’s peaceful occupation of the property. The penalties for harassment are severe and have resulted in heavy fines (over £10,000) and, in theory, even imprisonment for landlords.
An Access Legal Report compiled by surveying 2,000 landlords through OnePoll in August 2015 found that almost half (40%) of landlords have been subject to a tenant not paying rent. It suggested that UK landlords are subject to a £9.9 billion bill every year due to unpaid rent arrears and damage to properties.
The worst areas in the UK for rent arrears at the time of the report’s publication included Cambridge, Newcastle, Oxford, York and Manchester.
The Torts (Interference with Goods) Act 1977 continues to mean that a private landlord cannot by law take possession of another person's possessions in lieu of rent owed, even if the tenant has apparently disappeared. The only legal way to recover rent arrears remains going through the court.
'You need to have a legal team who are caring, who you absolutely trust and who will tell you the truth. Certainly from our point of view Denise Stephens from Access Legal has been absolutely amazing.'
Access Legal is the private client arm of Shoosmiths, a national law firm with offices throughout the UK. Our best in class lawyers work with individuals and their families to achieve the best result & solve their practical problems.Why Access Legal