If you are evicting your tenant for unpaid rent – is it worth bothering about trying to collect the rent arrears?
When I am instructed by landlords in eviction proceedings, they often find it difficult to comprehend that their rent may never be paid. But the reality is, that in the vast majority of cases, rent arrears are never recovered from evicted tenants.
It is unfair, it is unjust, but sadly it is true.
What I say to landlords is that I can get their property back for them, but I cannot guarantee to get the rent. Getting the property back is easy compared to getting the rent. Why?
- because you can’t get blood out of a stone
- because most tenants don’t leave a forwarding address and you need an address to bring a claim, and
- because the court enforcement procedures are pretty pathetic.
Lets look at these in a bit more detail.
Getting blood out of a stone
If your tenant is evicted for rent arrears, this generally means he does not have any money. Some morally upright and honorable types may make an effort to pay the arrears on their former properties after they have left, but I have not come across many. You may be able to get the money out of them eventually by relentlessly pursuing them for the debt, but this takes a lot of effort, and frankly there are probably more remunerative things you can do with your time.
No forwarding address
To bring any sort of claim against a debtor you need to know where they are. Although if you know where they work or their parents address (for example) you may be able to get an order for substituted service, this may not be much help in actually getting the money – although if you know where they work you may be able to get an attachment of earnings order. However most departing tenants just vanish into the sunset.
The court enforcement procedures
I feel a bit bad about saying this as I know a lot of good people work in enforcement and they can sometimes get surprising results. However my experience in trying to use them to extract unpaid rent from unwilling ex tenants is that they are pretty useless.
The ONLY procedure that I have found to be consistently useful is the attachment of earnings order. Here the Court orders the employer to pay the debt by (generally miserably small) installments direct to you. However even then often the ex tenant changes his job which effectively ends the order, unless you can find out his new job and get the order re-instated.
My advice to landlords is to forget about chasing impecunious tenants for unpaid rent, and concentrate on (a) getting them out quickly to minimise the losses and (b) making sure that the same thing does not happen again with your next tenant.
What is your experience in recovering rent from tenants evicted for rent arrears?
This post is one of a three part series on financial recoveries in eviction proceedings.
Dear Tessa
One reasonably cost effective tactic that might work in circumstances where the tenant has some assets (eg a car TV or other reasonably valuable electrical items) is to enforce the monetary judgment sparately to the possession order. You can do this by using the High Court Enforcement Officer route in tandem with a Warrant for Possession in the County Court
Bear in mind that the Possession date and CCJ are usually effective on the same day. It will take 4-6 weeks for a county court bailiff to fix an eviction date and most tenants will stay in the property until a couple of days before that eviction date
It costs £50 to transfer the CCJ into the High Court plus about £2.50 for the Writ fee. This is usually handled by the HCEO’s office and they can usually get a writ issued within a couple of days of the monetary judgment becoming due. The Landlord can then send the HCEO to the property to see what he can seize before the tenant is evicted by the bailiffs
I have recently had some success with this. The Landlord was able to get a car worth c£2K plus a TV and other electrical goods seized by the HCEO. It didn’t cover all the arrears but it made the Landlord feel better knowing that theTenant had not got away scott free and would be caused some hassle by losing the car and electrical items.
A week later the County Court bailiffs then obtained possession
Even if the HCEO does not seize anything, their thrown away costs are usually limited to £65+VAT – making it a reasonable “punt” for the Landlord who wants to make his point
Kind regards
Simon
Thats a great suggestion Simon, I will have to make a note of that one.
Purchase a rent guarantee insurance. It is by far the easiest solution. The insurers handle the eviction process, pay the landlord up to four months rent to cover the arrears and then pursue the tenants to the ends of the earth. Don’t know why more landlords don’t do this – my agency offers this for free as part of the management package.