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sam_ldn
23-04-2008, 16:50 PM
What can I recover from the tenants?

I am a private landlord renting out a flat and the tenant is perpetually late paying the rent, normally by only a few days but on several occasions it has impacted on my mortgage payments.

There is a standard AST in place saying that I can recover bank charges - but what bank charges can I reasonably recover?

So far, the charges incurred are:
1. Bank charges for a failed direct debit - the DD was for a mortgage payment and it failed because the rent was late going into the account.

2. Mortgage company charges of £35 for writing to tell me about the failed direct debit.

3. Cost of correspondence resulting from the letting agent formally writing to the tenant about the persistent late payment (they had already had a polite word, but to no avail).

The mortgage company’s letter also stated that if the DD failed a second time they would charge me an extra £85 debt counselling fee (not that I need this as I know exactly why the DD is failing!).

Based on my reading of the AST, I can pass the bank charges (1, above) on to the tenant, along with interest calculated on a daily basis for each day the rent was overdue. I can also pass on the cost of the correspondence (3, above).

Can I also charge the mortgage company fee (2, above) as this charge is being incurred as a direct result of the late receipt of the rent? For clarity, the bank account being used is only for the flat - rent going in, mortgage payments and service charges coming out - so it is clear that nothing else caused the DD to fail.

Also, if the mortgage company impose a debt counselling fee, can this be passed on as well? Again, this charge would only be incurred as a direct result of the late receipt of the rent.

Any help / guidance / suggestions gratefully received.

Sam

tsu3000
23-04-2008, 17:27 PM
I think the charges are reasonable but the interest on unpaid rent is peanuts and not worth bothering with IMHO.

I would seriously consider getting rid of the T. I've learnt that once they start to default on rent it will generally get progressively worse the longer you leave it.

My T had DD in place at the beginning but after about 2 months he gave me this BS story about him having to change bank accounts but never set up a new DD with his new bank. In the end I served him a S21 to get him out.

Hope this helps.

Ericthelobster
23-04-2008, 17:47 PM
I agree with tsu3000.

I don't think you can simply pass on the costs you've incurred - you need to have a fixed policy in place for late payments. As tsu says, interest charges are pretty pointless (certainly aren't a deterrent) - you're better off charging 25 quid to write reminder letters to them. But that needs to be in the AST agreement I think...

sam_ldn
23-04-2008, 18:34 PM
Thanks for the thoughts so far. A little more information which may helps clarify things...

Clauses in the AST states that the T shall be required to pay:-

a. an administration charge of £25 per late payment

b. a charge of £25 for each piece of correspondence sent to the Tenant by the Landlord or their Agent regarding overdue payments

c. any bank charges incurred by the Landlord

d. interest at a rate of 4% above the Bank of England for every day overdue


Therefore I think I can reasonably charge them £25 for the correspondence and £25 for each late payment, and I agree that the interest is not really worth bothering about.

My query was regarding what reasonably consitutues "bank charges" - in this case it can be:
i. (just) those charges relating to the bank account that the rent is paid into or
ii. can it also include the mortgage account which has a direct and clear relationship to that bank account?

Thanks in anticipation. Sam

susanne
23-04-2008, 18:52 PM
there is of course the court case re outrageous bank charges and the OFT's witterings about "fair" clauses to consider .....

Colincbayley
23-04-2008, 19:20 PM
there is of course the court case re outrageous bank charges and the OFT's witterings about "fair" clauses to consider .....

The result of which is due TOMORROW ( 24.4.08 )

agent46
23-04-2008, 19:26 PM
The result of which is due TOMORROW ( 24.4.08 )

Excellent! I was wondering when they were going to hand down judgement in that case.

I'll bet you a Guinea the loser appeals.

Colincbayley
23-04-2008, 19:29 PM
Excellent! I was wondering when they were going to hand down judgement in that case.

I'll bet you a Guinea the loser appeals.

No bet!

However, the judgement is only on the basis of 'could bank charges be unfair' the OFT will then have to say that they are or are not and it will then drag out for the next 50 yrs or so.

Further info at www.moneysavingexpert.com