Is it illegal to require tenants to pay rent if it is more than six years overdue?

We had a question for our Blog Clinic recently from Mary, who is a tenant in England.

Mary is a social tenant, and her question (which I am not going to answer in full as we do not cover social housing here) was about her local Council, which had discovered that she owed £1,800 from a previous address.

As a result of this, they were refusing to allow her onto the Local Authority’s ‘choice housing register’ to bid for a bigger property.

She went on to say:

My partner has been browsing the internet and found under British law, the Limitation Act of 1980.  This says that any council or landlord in the United Kingdom can only pursue rent arrears for a maximum period of six years.  So, therefore it has to be written off by law, and any money paid by me would have to be paid back as they are breaking British law.

So, let’s take a look at the Limitation Act and see if she is right.

The Limitation Act 1980

This is an act that basically sets limits on the time period when a creditor can bring proceedings against a debtor through the courts.

There are different time limits for different types of claim, but rent arrears is covered by section 19 which says:

Time limit for actions to recover rent.
No action shall be brought, and the power conferred by section 72(1) of the Tribunals, Courts and Enforcement Act 2007 shall not be exercisable, to recover arrears of rent, or damages in respect of arrears of rent, after the expiration of six years from the date on which the arrears became due.

So Mary’s partner is correct in part.  However, the Limitation Act is all about time limits for bringing court proceedings. The words ‘no action shall be brought’ means court action.

The interpretation section of the act, section 38, describes ‘action’ as follows:

(1) In this Act, unless the context otherwise requires—
“action” includes any proceeding in a court of law, including an ecclesiastical court(and see subsection (11) below);

and

(11) References in this Act to an action do not include any method of recovery of a sum recoverable under—

(a) Part 3 of the Social Security Administration Act 1992,

(b) section 127(c) of the Social Security Contributions and Benefits Act 1992, or

(c) Part 1 of the Tax Credits Act 2002,

other than a proceeding in a court of law.

So, I am afraid Mary is incorrect in saying that any money paid by her would have to be paid back.  The money is still owed, even though the creditor has lost his chance of claiming it through the Courts.

For example, so far as I am aware (and do post a comment if I am incorrect, benefit issues are not my ‘area’), it would be legal for the Council to withhold benefit payments until the £1,800 is cleared.  Offsetting is not the same as bringing an ‘action’ or court proceedings.

This is also why if you owe money to a bank, they can transfer money from any other account you have with them, which is in credit, to cover it.

So, I suspect that the Council are acting legally when they refuse to allow her onto the housing register.  There may well be rules about eligibility, which include long-standing rent arrears due in respect of an earlier property.

When does the limitation period start?

There is also the fact that the limitation period may start a lot later than you think.  If you owe (for example) £6,000 dating back seven years, but five years ago, you confirmed in an email that you owed this money, the limitation period will run from the date of the email, not the date that the debt fell due.

Or, if you paid £200 off the debt four years ago, the limitation period will run from the date of payment.  Note that the payment can be made by anyone, including by a debt management company or advice agency acting on your behalf.

So, in short, the limitation period runs from the last time you acknowledged or paid part of the debt.

However, the following do not count as written acknowledgement of a debt:

• A letter from you to the creditor clearly stating you don’t owe the debt
• A letter from the creditor to you
• Speaking to a creditor over the phone

It is sometimes quite difficult to work out when a limitation period starts so if you are not sure, it is best to take legal advice.

The situation in Scotland

Finally, my research has told me that the situation is different in Scotland.

Here, the limitation period is normally five years, and after that time, the debt becomes prescribed.  Once a debt is prescribed, the law says it no longer exists, so there’s nothing more the creditor can do to collect it.

So, if Mary lived in Scotland, her question would be largely correct.  Sadly (for her), though, she lives in England.