How to recover rent arrears from residential tenantsJanuary 30, 2019
We often deal with landlords whose tenants have not paid any rent for a number of months. In some cases, landlords rely on this income to pay their own mortgages and recovering rent arrears is of great concern to them.
We will explore in this article the different ways of recovering rent arrears from residential tenants.
We always advise landlords to put together a detailed schedule of rent arrears before taking any action. Once we have been provided with this, one of the first things to consider is whether the tenant in question can afford to pay the outstanding rent. If the tenant does not have means to make payment, landlords will not be able to recover the unpaid rent even if a judge has ordered the tenant to pay.
Option 1: Giving notice to move out and bringing a claim to recover rent arrears
There are two types of notices that landlords can give to tenants before evicting them. The first one is a section 21 notice, which brings the tenancy to an end and is the quickest and cheapest way of gaining possession of a property. The second one is a section 8 notice, which also brings the tenancy to an end due to a breach of the tenancy agreement, e.g. unpaid rent, and it involves a longer and more costly process of gaining possession including a court hearing.
If the landlord serves a section 21 notice on the tenant, rent arrears will not be recovered as part of the possession claim. However, the landlord can bring a separate claim in the County Court to recover the outstanding sum. There is a court fee payable, which can vary depending on the value of the claim.
If, on the other hand, the landlord gives a section 8 notice, he will be able to recover possession of the property as well as rent arrears. The landlord seeking to evict the tenant and recover rent arrears would need to prove that they have grounds to evict the tenant. Rent arrears is one of the most common reasons for landlords to give a section 8 notice rather than a section 21 notice, however, the tenant needs to be at least 2 months (if rent is paid monthly) or 8 weeks (if rent is paid weekly) in arrears.
Many landlords opt to serve a section 21 notice to gain possession of their property, making possession a priority rather than recovering rent arrears, especially in cases where tenants are not likely to pay.
Option 2: Bringing a claim against the tenant
If the tenant has already moved out of the property, the landlord does not need to give the tenant any notice. Landlords who want to recover rent arrears will need to bring a claim in the County Court as explained above. It will be necessary to have a current address for the tenant.
What if the tenant does not pay?
Once a claim has been issued and judgement has been entered against the tenant, landlords will need to use one of the enforcement procedures available if the tenant does not pay.
There are different enforcement procedures and which one to use will depend on the circumstances and the tenant´s background. We will take these factors into account and advise on which one will be the most beneficial to use.
How can we help?
We can advise landlords on the options available to recover possession of their property and any rent arrears due. We will focus on the best cause of action and advise landlords on timescale and costs.