Talk contents: Dealing with Tenants Rent Arrears By Tessa Shepperson, Solicitor www.landlordlaw.co.uk www.landlordlawblog.co.uk Part 1 Choosing the tenants Part 2 First default Part 3 - Possession proceedings Part 4 Using the bailiffs Part 5 County court judgements Further information 2 PART 1 Choosing the tenants The single most important thing in letting property. Avoiding bad tenants Get full details from T (esp employment) Double check references Credit check Gut feeling Will penalties influence T? Deposit + 1 month in advance Guarantee? Ensure cheques cleared 3 4 Bad signs Desperate tenants Tenants who are unwilling to give their current address or personal information Tenants with a difficult personality Tenants who change jobs regularly If you feel uneasy about a prospective tenant let to someone else! 5 Remember: It is easy to let a tenant in but can take months to get them out A bad tenant can cost you a lot of money in rent arrears and damage to your property Con men succeed because they appear respectable 6 1
Letting agents Precautions: National Approved Letting Scheme (NALS) Association of Residential Letting Agents (ARLA) Royal Institute of Chartered Surveyors (RICS) The National Association of Estate Agents (NAEA) The Property Ombudsman 7 Check their terms and conditions carefully (Foxtons case) If possible talk to their other customers Get someone to make enquiries as a prospective tenant Note that if they do not do their job properly - as the landlord you are responsible! 8 Generally: Make sure your paperwork is in order: Tenant information form (signed by T) Tenancy agreements (signed copies) Receipts and certificates for all work done and items purchased for the property Gas & electricity inspection certificates Confirmation of deposit protection & receipted tenancy deposit notice All correspondence and attendance notes (in date order) 9 And : Ensure property is in tip top condition so T has no excuse for withholding rent Respond promptly to complaints and carry out repair work Check bank statements Consider serving a s21 notice at an early stage as a precaution 10 PART 2 First default Negotiated agreement: Contact tenant telephone or visit Also send a letter Find out why rent not paid, if possible If tenant un-cooperative, consider serving possession notice (see part 3) Follow up if rent not pd w/in 14 days Avoid harassment Keep detailed records Always try to do this if possible Confirm any agreement in writing Warn the tenant that eviction may follow if terms not kept Monitor payments made, and send warning letters on default 11 12 2
Tenant looking to be re-housed: LA will not normally rehouse until a possession order has been made Tenants will be told not to vacate before this - if they do, they will lose their right to re-housing Action eviction ASAP - you are doing them no favours by delaying Tenant in financial difficulties: Be sympathetic, so they will keep you informed Consider reaching agreement Help them apply for HB if appropriate (letter of authority) Refer them to reputable debt advisors (e.g. CAB) Serve relevant possession notices 13 14 Anatomy of a possession claim 1 st stage notice section 8 or section 21 Notice to quit 2 nd stage possession proceedings Accelerated Fixed date 3 rd stage - bailiffs 15 PART 3 Arrears over 2 months Ground 8 the serious rent arrears ground: If the tenant is in two months arrears of rent or more on: The date the s8 notice is served, and The date of any court hearing The Judge must make an order for possession 16 Serve notice Housing benefit tenants ASTs - serve a s8 notice citing ground 8, and Consider also serving a s21 notice (if not already served) Non ASTs Notice to Quit If you are not certain which notice applies, take legal advice Write to the benefit office, tell them T is more than 8 weeks in arrears and ask for payment direct they should do this (even if T receives LHA) If arrears caused by HB delay serve a s8 notice ASAP (using ground 8) and send a copy to the benefit office 17 18 3
Possession notices get them right Tenants will usually ignore an invalid notice It makes you look unprofessional if the notice is wrong An incorrect notice may prevent you from getting a court order for possession 19 Section 21 notices No prescribed form but it needs to be carefully drafted (+ saving wording) Incorrect notices are the most common reason for landlords failure at court Notice period is not less than 2 months or end of tenancy (whichever is later) Different requirements whether notice served during or after the fixed term Notice will last until ended by T being given a new tenancy/renewal 20 AST / section 21 ebook Out soon Sign up to mailing list to be kept informed www.yourlawstore.co.uk Section 8 notices Used for all other grounds Mostly used for rent arrears Notice must be in the prescribed form For rent arrears claims - notice period is not less than 2 weeks Notice has a life of 12 months 21 22 Notices to Quit Not often used nowadays. Not valid for ASTs Notice period not less than 28 days Only use for: Common law tenancies (company lets, resident landlords, rent over 25K) Rent Act 1977/protected tenancies Serving notices Keep a record of : Name of person serving How served Date and time of service Service by hand preferable Get tenant to receipt and date notice if possible Consider having an independent witness 23 24 4
Landlord-Law service: Which possession proceedings trail All possession notices available online Guidance notes Covering letters Landlord Law do-it-yourself kits for possession also include the notices 25 Schedule of rent arrears MUST be accurate Start from the first default Note every pmt & rent due, in date order Do not include anything other than rent (e.g. no interest) The Judge will need to see a schedule in this format if court action taken: 26 Sample schedule: Date Rent Due Rent Pd Arrears 01-Nov-06 550.00 550.00 24-Nov-06 80.00 470.00 01-Dec-06 550.00 1,020.00 07-Dec-06 520.00 500.00 13-Dec-06 250.0000 250.0000 returned cheque 80.00 330.00 returned cheque 520.00 850.00 27-Dec-06 220.00 630.00 01-Jan-07 550.00 1,180.00 09-Jan-07 200.00 980.00 19-Jan-07 150.00 830.00 30-Jan-07 100.00 730.00 01-Feb-07 550.00 1,280.00 27 PART 3 Possession proceedings Easy if you get the paperwork right, but A nightmare if something goes wrong! Do not act in person unless you know what you are doing, or Use a Landlord-Law online kit! Otherwise use a specialist solicitor fixed fees should be available 28 What sort of possession proceedings should I use? Accelerated possession proceedings (no Ct hearing) - s21 & possn only (i.e. no CCJ), needs perfect paperwork Separate claim for a CCJ If can t use s21 (e.g. cannot wait) use the standard procedure Landlord Law Trails 29 How long will it take? Accelerated about 8 12 weeks from sending the forms off, if all goes well Standard procedure the hearing will be listed 4-8 wks after issue T btn14 days -6 weeks to vacate (mandatory grounds only) If bailiffs needed, allow another 3-8 weeks 30 5
Mandatory grounds serious rent arrears Section 21 Grounds Discretionary grounds Judge does not HAVE to make order Suspended orders 31 Four reasons why you should NOT use discretionary grounds:- Your tenant may be able to defend the claim Your tenant may be able to get legal aid You may end up paying your tenant s legal costs The Judges can stay/suspend possession 32 Possession orders A possession order will give a date when T must vacate Suspended possession orders Fixed date claims - money judgement for rent arrears Rent arrears claims - occupation rent/mesne profits Orders for costs Date for payment of any money award Check them carefully on receipt! PART 4 Using the bailiffs If the tenant has not gone by the date in the possession order, you can get the court bailiff to evict him You must not physically evict the tenant yourself Arrange to be at the bailiffs appointment and take a locksmith 33 34 PART 5 County Court Judgements Fixed date possession proceedings based on rent arrears will include a claim for a CCJ Otherwise, only get a CCJ if T is likely to pay Attachment of earnings order Landlord-Law Legal Kit A 35 Further information: Rent Arrears Action Plan A step by step Preliminary guidance Standard letters / checklists Notices What possession proceedings Or claim for a CCJ Available foc to Landlord Law members Separate kit? 36 6
Also: Landlord-Law - www.landlordlaw.co.uk Lodger Landlord ww.lodgerlandlord.co.uk Blog www.landlordlawblog.co.uk Books - Residential Lettings, and Renting: The Essential Guide to Tenants Rights (Lawpack) Landlord-Law Kits Your Law Store 37 If you would like a copy of this powerpoint Leave your email address in the box 38 That s all folks! www.landlordlaw.co.uk www.landlordlawblog.co.uk 7