Here is a question to the blog clinic from Rajiv (not his real name) who is a landlord.
I have a tenant who, during the AST, fell into arrears by 5 months claiming she wasn’t receiving her housing benefit.
She subsequently has gone into a periodic tenancy and has started paying a reduced amount in rent but is still over £5000 in arrears.
I would like to evict her now but I do not know my rights – can I still recover the debt using a collection agency?
Answer
From the sound of it you need to take steps to evict this tenant ASAP as she is unlikely ever to make up the arrears or pay the full rent. This is the only way you can stop the arrears increasing.
Don’t worry about being harsh by evicting over Christmas by the way. It is now mid December so you are not going to get possession before late February / early March at the earliest.
I am assuming by the way that if you took a deposit, you protected it properly and served the prescribed information. If this was not done you need to sort this out first.
Getting possession
You then need to serve a section 8 notice based on rent arrears and a section 21 notice ASAP. Make sure you do this in a way you can prove if she denies it later. Serving by hand with an independent witness is best. DO NOT serve just by ordinary post as you cannot prove the letter actually arrived.
You then need to issue proceedings in the courts once the notices have expired. The section 8 notice will expire first but the section 21 procedure is more straightforward and less likely to go wrong.
Getting the rent arrears
So far as the rent is concerned, if you use the standard procedure based on ground 8 this will include a claim for a money judgment and you will get a CCJ, whereas the section 21 route is for possession only.
You can issue a separate claim for the rent (for example using the Money Claim Online service) if you decide to use the section 21 ground. However be warned that in my experience landlords rarely recover rent arrears from tenants who are evicted for non payment of rent. Particularly where, as here, the tenants are on benefit so will not have the money anyway.
Landlords often find this hard to accept but if your tenants don’t have any money, they can’t pay your rent, even if you get a Court Judgment (and note that many judgments go unpaid, I think it is about 30%).
So far as a debt collection agency is concerned, unless they are a firm of solicitors (when they will get a judgment for you via the courts), all they can do is go round and bang on the door and talk to the tenant. They have no special legal powers. You want to be careful about this as you do not want to be accused of harassment.
You are best concentrating your energies on getting vacant possession ASAP so you can start renting to a paying tenant.
An alternative might be to sit down at the table with the tenant and/or the council and/or the CAB and see what is happening with those housing benefits. Sometimes tenants are not as “benefit-savvy” as you may think they are. The tenant may be eligible for 5 months of housing benefits, but not realise it, for example.
Don’t make your tenant fear you. It does not help. Try to work with your tenants, by seeing them as people instead of cash cows. It benefits both sides.
That is very true and I would always recommend that landlords do this with tenants. However the best time to do this is when the arrears first start.
This tenant has been underpaying for months. £5,000 is a lot of money. I would be very surprised if the landlord has not discussed her arrears with her many times and asked her to deal with them. Obviously she has not done so, or it may be impossible for her due to the level of benefit she is entitled to.
She may still be able to do something, but probably only if she thinks that eviction is a real option – otherwise there is nothing to stop her staying there and underpaying forever.
This would be very unfair on the landlord. It is not the function of private individuals to house needy people at their own expense.
£5,000 is a lot of money but a lot of councils have money to either lend interest free or combine with DHP (Discretionary Housing Payment.
These facilities arent there because the council is kind but because the costs of rehousing through the homelessness system will be far in excess of £5,000. In many councils there is an unadvertised policy to avoid picking up at all costs, even if it means clearing rent arears.
Rent arrears dont automatically mean a person is intentionally homeless or even if they are so deemed then it doesnt always mean the council will refuse assistance
Nothing wrong with first class post delivery Tessa as long as a certificate of service is completed at the time and witnessed.
I agree personal delivery is always best, personal service even better, but what if the property is distant?
The tenant of course also cannot prove they never received the notice either!!
I love all of this The council will pay the arrears! only ever heard of this once in the past 4 years. I agree about open and transparent communications at the start, experience shows this is only successful 30% of the time. so do not dawdle on this phase. But it is a warning of things to come so i always encourage landlords to be positive in their decision making. This may sound harsh but ultimately, especially in benefit tenants, the chance of the debt being settled is practically non-existent. The law is very tenant biased and getting more so. Tenants need to realize that landlords are not millionaires and cannot afford to lose money on their properties.
I have a question, I would like to confirm if the money order is actually a CCJ as you claim or merely a legal recognition of debt not listed on any register? it is my belief it does allow you to skip a CCJ and proceed to enforcement options. can you confirm this please.
If you get a possession order based on the rent arrears grounds it will include a CCJ for the rent. However this will not go on the register of CCJs until you have taken steps to enforce it.
The rent arrears with the possession order here is a proper CCJ but most landlords don’t bother to enforce it as there is no point. There are costs involved in enforcing CCJs and if the tenant has no money this is a waste of the landlords time and money.
There is something else to consider. Sometimes… a council pays housing benefits into the landlord’s account but they don’t actually end up with the landlord (because of a typo or the like). The tenant won’t even be aware of it if that happens.