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Rent Arrears Fears: Your webinar questions answered

Hundreds of you joined us for our 'Rent Arrears Fears' webinar, hosted in conjunction with the National Landlords Association. Watch the video playback of the webinar below.

Our next free webinar, Deposit Dos and Don'ts: Part One, is taking place on Wednesday, 23rd August at 7.00pm. Register here. The first in a two part special exploring the dramas of deposits, part one - being hosted by Urban's Adam Male and Suzy Hershman from mydeposits, is exploring registration, legislation and how to make sure you're handling your tenant's deposit correctly.

Our rent arrears webinar provoked plenty of interesting questions from landlords all over the UK, and we've worked with the NLA's Advice Line to answer them all:


Q

The current tenant in one of my properties hasn't paid rent since January 2017. The county court issued a possession order request him to leave on 26/6/17 but he has not left. I have made an application for the bailiff to carry out an eviction. In the meantime I am getting very bad reports from the neighbour. I strongly believe he is involved in illegal activity, what should I do?’

A

Seeing as this is only a suspicion at best, and you have no firm evidence it is not advisable to dial 999 just yet. Call your Safer Neighbourhoods team, (previously the Community Policing team PSCOs). They may do a few patrols near the property, or speak to a neighbour.
Proceed as standard with the possession application for bailiff – this is underway and you wouldn’t gain anything by elevating the case.


Q

What is best in what circumstances? S8 or S21?

A

If you are keen to regain possession of your property, section 21 is probably the option for you. It is a no fault order, meaning that you do not have to have a reason to serve it to your tenants, and as long as your paperwork is correct there should be no reason that it would not be successful.

However, if you have outstanding rent owed, section 8 may be the better option. If your tenant owes a minimum of two months’ rent, you can serve a section 8 notice. You can also serve both notices at the same time, but can only gain possession with one.


Q

What is your advice about serving a S21 on the first day of the tenancy in Wales?

A

With Welsh tenancies, there is no need to keep to the minimum term as there is in England – you can serve a S21 as soon as the tenant moves in if you want to – although this is not ideal! There is also no shelf life on the S21.


Q

My tenant has left voluntarily but there are still rent arrears which the tenant has promised to pay and then reneged? I would still prefer an informal route to seek payment, but I wonder if a formal process is required?

A

If you have a good relationship with the tenant, you could consider offering an arrears agreement (payment plan) – set a realistic amount that your tenant is going to be able to afford. Alternatively, you can claim unpaid rent with a money claim at County Court. If your tenant has a guarantor, you can decide at the court stage to file against the tenant or guarantor, whichever you believe you will have the best change of securing the outstanding rent from.


Q

If your tenant falls behind with their rent and does not pay and you have a guarantor, what is the procedure for getting the guarantor to pay?

A

Contact the guarantor in writing, asking them to honour their pledge. Send an update of rent statement and proof of arrears – proof can be a bank statement and a rent schedule. Post this first class with proof of postage – do it at the Post Office Counter, so you have a paper trail. Hopefully at this stage they pay, if they don’t you can go to the County Court and file a money claim.


Q

What is your view on guarantors?

A

Guarantors are a great idea, and can offer a safety net should your tenant ever fall into financial difficulty and find it hard to pay their rent.; Guarantors will be required to go through the same referencing process as the tenant, must be over the age of 18 and be a UK resident.


Q

My tenant is about £2500 in arrears. How can I reclaim this?

A

If the arrears have amassed over the course of two months of more, you can file a Section 8 to seek your unpaid rent back.


Q

When does the section 21 have to be be given in form 6Aa?

A

It depends when the tenancy started. The form must be served using a form 6A for all tenancies starting on or after 1 October 2015. If the tenancy started before 1 October 2015 you don’t have to issue the section 21 on a specific form, simply produce the notice in writing, explaining that you’re giving notice under Section 21 of the Housing Act 1988.


Q

Is this only in England or UK wide?

A

These rules apply to tenancies in England. For more in depth information on managing rent arrears in Ireland, Scotland and Wales, contact the NLA’s advice line on 0207 840 8900


Q

is it true that the only way a tenancy can be legally ended is under a court order? This includes voluntary surrender. there is a danger that the tenant can come back claiming no surrender took place.

A

If a tenancy is ended via a voluntary surrender, an agreement by both parties to terminate by mutual agreement, you must be sure to secure a dated document, signed by both yourself and the tenant, agreeing to this. This ‘Declaration of Surrender’ document is required by Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. This would serve as a legal document attesting to the agreement.


Q

At what point after serving section 21 N5b form to be filled?

A

The N5B form would be completed once the section 21 has been served to the tenant. This is available for download from the Ministry of Justice website. The court will write to you and the tenant, advising of the notice. Your tenant has 14 days to respond. You can check if your tenant has responded by contacting the court. If there has been no response, you can ask for possession without going to court.


Q

Can the documents such as EPC, Right to Rent documents be send by email?

A

Yes. Email is perfectly acceptable format for handling these important documents, in fact it is a great way to provide a unarguable, dated paper trail! To ensure that you are fully covered when sending prescribed information or other important information request a ‘Read Receipt’ or request that the recipient responds on receipt. You cannot serve notices by email though.


Q

I heard that for a section 8 to be granted by a judge, at least 2 full months rent arrears by be outstanding. Surely tenants can get round this by just paying a little of what is owed?

A

On the day of the hearing if there is less that two months’ rent outstanding then the order will not apply. However, all is not lost! You can ask to the court to apply a suspended possession order on your tenant. This will introduce a payment plan, based upon their circumstances. For example, they may be ordered to pay the full rent plus an additional £100 a month until the arrears are paid off. This will result in two outcomes, with the landlord will receive all of the arrears, or the tenant will default on payments. In this instance, the suspended order becomes a live possession order, and the landlord can file a possession application with a bailiff. If the tenant is a repeat offender, the judge may grant on grounds of 10 and 11 alone.


Q

Is there a different process for benefit tenants?

A

No – even when the rent is being paid by a third party (local council for example) the agreement on the tenancy contract is still between the landlord and the tenant and the same procedures can be followed. It is a little easier for them to get the possession order extended to 42 days though.


Q

When does the process move to bailiffs?

A

If you need to move the proceedings to bailiffs, you can do so the day after the court order expires. You can apply using the N325 form, at a cost of £121. The bailiffs will take up to eight weeks to respond, and you will have to complete an Ex97a risk assessment form. Once appointed, the landlord will be contacted with a date of attendance at the property, as will the tenants.


If you have any questions about rent arrears, or any of the issues relating to it, the NLA Advice Line is free for all members. For membership contact the NLA at 020 7840 8900.


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