As the cost-of-living crisis continues, more and more tenants are unable to afford their rent and are falling into arrears. This can be financially devastating for landlords, especially if mortgage rates are biting hard.
If you are a landlord whose tenants have stopped paying their rent, what can you do? Kenneth Amkye, an Associate in our civil litigation team with Morlings in Maidstone reports.
Why might your tenant be in arrears?
Aside from the cost-of-living crisis making rent less affordable for many people, there are a number of reasons why your tenant might be behind with their rent payment. Aside from just not wanting to pay, these could include:
- physical injury, illness, or loss of mental incapacity;
- job loss or work reduction;
- delays with their salaries or benefits;
- problems with their bank; or
- being unhappy with the condition of the property.
Talk to your tenant
Your first step, if your tenant falls into arrears, is to talk to them as soon as possible to find out why they are late with their payments. Let them know how much is outstanding, and ask them to pay what they owe. You may need to agree to carry out repairs if they are withholding rent due to the poor condition of the property.
Be pragmatic about seeking a solution
It may be difficult for your tenant to repay all they owe in one lump sum, so you may want to agree a payment plan whereby they pay back a set amount weekly or monthly until the debt is settled. The Housing Mediation Service might be able to help you agree on a realistic repayment plan.
Ensure you put everything you have agreed in writing and send it to the tenant.
Tenant in receipt of benefits
If your tenant is on benefits and is struggling to pay the rent amount that their benefits do not cover, you can:
- persuade your tenant to apply for a discretionary housing payment;
- encourage a tenant on Universal Credit to ask for a rate rebate, which they can claim even if rates are included in the rent;
- if your tenant is on housing benefit and is six weeks behind with their rent, or if they are on Universal Credit and are two months in arrears, you can ask for housing-related benefits to be paid directly to you; and
- if the arrears continue, you can ask for deductions from benefits to go towards the arrears.
Eviction under section 8 of the Housing Act 1988
It may be that you would like to evict a tenant who is habitually behind with their rent. This is allowable under section 8 of the Housing Act 1988 at any point of a fixed term tenancy, if your tenant is:
- more than eight weeks in arrears if paying weekly or fortnightly; or
- two months in arrears if paying monthly.
You will need to write to your tenant explaining that you are ending the tenancy, outlining your reason for doing so, the date you want them to leave the property (under a section 8 notice this will usually be at least two weeks from when the notice is served), and how you plan to recover the rent they owe.
If they do not leave the property by the specified date, you will need to apply to the court for a possession order. If an outright possession order is granted, your tenant will usually need to leave 14 days after the order is made. If they do not, you can apply for a warrant of eviction, allowing you to send bailiffs to forcibly evict your tenant.
It may be that the court will grant a suspended possession order which will allow your tenants to remain in the property as long as they repay all the arrears and keep paying their rent on time. If they do not stick to the agreement, you are entitled to apply for a warrant of eviction.
Eviction under section 21 of the Housing Act 1988
If your tenant’s fixed term tenancy is drawing to a close or there is a break clause in the tenancy agreement which allows you to bring the tenancy to an early end, you may want to evict your tenant under section 21 of the Housing Act 1988.
This allows you to evict your tenant without giving any reason and thus saves you the work of providing evidence of arrears to the court, as required for section 8 evictions.
The procedure is largely similar to that of a section 8 eviction, but importantly a section 21 notice to recover possession must give the tenant at least two months to leave the property. This should be served at least two months before the tenancy is due to end, or before the break clause can be triggered. If not done correctly, the court is unlikely to grant a possession order.
Recovering overdue rent
If your tenant moves out and rent is still outstanding, you can:
- propose deducting the amount owed from the deposit;
- claw back the money owed from the tenant’s guarantor; or
- take your tenant to court to recover the debt.
How we can help
The eviction process can be stressful for both you and your tenant and the consequences for getting it wrong can be both costly and time-consuming. If you want to evict a tenant for rent arrears, it is important to seek expert legal advice.
Our team of specialists can help you decide which eviction procedure to pursue, ensure all the required paperwork is filled out correctly and served on the tenant in the proper manner, represent you in court if a possession order or warrant for eviction is required, and advise you on the best way to recover any rent that is still outstanding when your tenant moves out.
Note: On 17 May 2023, the Government announced the new Renters' Reform Bill will ban section 21 no-fault evictions. However, this Bill is not yet in force.
For further information, please contact Kenneth Amakye in our civil litigation team on 01622 673081 or email firstname.lastname@example.org. Morlings has offices in Maidstone, Tenterden, Tonbridge, Chatham and Gravesend.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.