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View Full Version : Late\Non Payment .... the best way to deal with??



simon04
15-04-2008, 18:45 PM
This is the first time I've had any payment-related problems, and would appreciate any further advice on how to handle the situation.

I've had a pair of tenants in my property for 6months on an AST.

Back in January, the tenant telephoned, reporting a problem with the standing order being taken early..... (yes, that's what he said!). He said the standing order had bounced due to him having insufficient funds to honour it.

He sent a cheque, but £35 short due to him having insufficient funds because of overdraft fees when the standing order allegedly bounced. Though not a large ammount, he did pay this a month later.

Feb and Mar were ok, but I realised the April payment hadn't been made. As he hadn't contacted me, I wrote a reminder and sent it by recorded delivery. The day after he received this, he wrote back, enclosing a cheque for the rent, minus £200. ...... He said his bank cards had been stolen and some cash withdrawn, leaving him with insufficient funds to pay the full ammount again.

In a nutshell, my question is;

* I would like to give the benefit of the doubt, despite being dubious about the excuses. As it's not a relatively huge problem at present, I assume it's worth being a little patient, rather than the hassle of giving them notice, readvertising etc??

* Is there anything I need to do (e.g. further letters) as a precaution incase there are further issues with late\non payment?

* Though I'm willing to be patient , it's not my duty to keep subbing them each time, is there anything else I can do to manage the situation?


Thanks in advance for any tips...
Simon

jta
15-04-2008, 19:44 PM
If the T really has had his cards stolen then the bank will replace his money, I would suggest you threaten to charge interest on the outstanding amount but also suggest to him that he gets his bank to let him have an o/d for his essential bills, you can't get more essential than rent. The downside of this is that if he cannot get a small o/d then his credit must be very poor and you are probably whistling into the wind.

Colincbayley
15-04-2008, 20:29 PM
Tuff call on this one. I would give him the benefit of the doubt. Send him a polite letting advising that the rent MUST be paid, on time and in full each and every month.

A terms of business letter issued with the AST detailing charges for such things would put a stop to it ( Or he will end up paying you charges as well as his bank !! )

SEB
15-04-2008, 21:14 PM
My ears are wiggling on this one.

Sometimes, tenants try it on.
First of all, small amounts are withheld/not paid to test your response, then larger amounts are withheld when your initial response favours the tenant and he thinks you won't take action.

It could be that he is legitimate, but what about the other tenant? They are jointly responsible. Have you approached them? Written to them?

I wouldn't give them any more rope than you have already. Soon, they may have to pay for someone's "funeral", "urgent trip to Australia", "emergency dental work".....

If this happens again, serve S8 notices.

simon04
16-04-2008, 05:58 AM
As soon as I realised the standing order hadn't arrived in Apr, I wrote a reminder, stating that the rent hadn't arrived and stating the exact due date every month. I addressed this to both names (yes - they're both jointly liable by the AST). I used recorded delivery as a precaution.

I would have been more convinced if they had telephoned first, rather than me having to find out and chase them....

Considering the advice I've had here, I will telephone them to discuss this, mentinoning that I may have to charge interest, the emergency overdraft, and that I must have consistent payment every time or etc etc....

Thanks for advice so far

Ericthelobster
16-04-2008, 07:51 AM
Considering the advice I've had here, I will telephone them to discuss this, mentinoning that I may have to charge interest, the emergency overdraft, and that I must have consistent payment every time or etc etc....I think the key thing here, rather than giving vague warnings and threats to the tenant, is to either tell them or agree with them exactly what you need to happen; when you need it happen by; and what will happen if it doesn't. And then if they don't comply, you carry out whatever 'sanction' you've warned them about, without further ado.

simon04
19-04-2008, 05:54 AM
Well, Ive now written again politely, but with a deadline.....

It is normally valid to bill the tenant for the interest I've been charged in these situations?

Ericthelobster
19-04-2008, 08:06 AM
It is normally valid to bill the tenant for the interest I've been charged in these situations?It's usual to include provision for interest charges in your AST agreement - it doesn't make any difference whether you've actually been charged interest by your bank, or whether you've got a healthy enough balance to avoid having overdrawn as a result of the late rent payments.

Personally I wouldn't start charging interest until the payments are quite seriously overdue - firstly, the amounts are pretty trivial initially - eg 8% interest on £500 for a month overdue is only £3.33, so it ends up almost being more trouble than it's worth to work it out and makes you look a bit petty; certainly won't be enough to jog the tenant into action. A better method is to charge for writing reminder letters (£15-£20?) (again, provided you've allowed for this in your agreement).

bagpuss
20-04-2008, 15:56 PM
We had exactly the same problem with one of our tenants - we chased him for the rent for almost four months - got bits and pieces of rent and lots of excuses. We served them both with a section 21 and a section 8 and formally told the tenant we would go through the courts to get a ccj against him if he didn't pay his arrears.

They both moved out on time and the tenant who owed rent paid up in full + interest charges.

I'd be firm from day one as this sort of tenant just strings you along for as long as they can. One more word of advice - this is a business arrangement so don't get too personally involved, either by a) getting irate about the siuation or by b) feeling unduly sorry for the tenant. Doing (a) will increase your blood pressure doing (b) will decrease your bank balance.

Sportingdad
20-04-2008, 18:48 PM
The best way to avoid these problems is before the tenant moves in, is to always take a guarantor.......my advice to all tenants that if they do not know anyone who will trust them, how do they expect me who does not know them from Adam to pass them over a £150-300k property.

simon04
22-04-2008, 18:22 PM
Since my last letter to the tenants, I've had no further contact and the deadline is approaching.

The remaining £200 is a fortnight overdue now.

Is it best to serve a section 8 or 21??

I understand the section 8 can be "gotten out of" by tenants by making a part-payment, but does have the 12 month validity. Is a section 21 preferable in this case?

jta
22-04-2008, 18:36 PM
You can issue both S21 and S8 read the advice from other posters on this site particularly Jeffrey's contributions.

simon04
23-04-2008, 10:37 AM
Assuming this is the correct grounds for posession, what does the subsection 1(b) relate to??


Ground 10

Some rent lawfully due from the tenant—

(a)is unpaid on the date on which the proceedings for possession are begun;
(b)except where subsection (1)(b) of section 8 of this Act applies, was in arrears at the date of the service of the notice under that section relating to those proceedings.


(Is 2 delayed payments classes as persistent? If I was to use ground 11 )

jeffrey
23-04-2008, 13:58 PM
Section 8(1)(b) allows Court to dispense with service of s.8 Notice if this is just and equitable; do not rely on this except in extreme difficulty!

Two delated payments could be "persistent", so lob-in g11 too even if Court ultimately strikes it out.

simon04
25-04-2008, 06:05 AM
Thanks again for all the useful advice. It's certainly helped clarify matters....

It's deadline day today, but still no contact from T's, (not even a phone call about the noisy boiler I need to repair). If the payment doesn't arrive, I will be serving S8 and S21.

Even if they DO pay, is it best to serve the notices anyway incase of future offences? (I get the impression that atleast one of the notices is valid for 12months?)


Or am I best waiting to see if they do reoffend?


Of course, I do wan't my payment, but eviction would also cost. I guess the dilema is whether to actually to go ahead with eviction, if they do eventually pay....... any perspective on this?

jeffrey
25-04-2008, 12:59 PM
Two delated payments could be "persistent", so lob-in g11 too even if Court ultimately strikes it out.

Sorry- meant 'delayed' payments.

House
25-04-2008, 14:59 PM
The s8 notices last a year from the date of service, the s21 lasts forever or until a new AST is agreed or until the world as we know it ends (whichever is shorter :) )