Late Payment Legislation - Interest Rates and Recovery Steps

[cymro123]

Somebody on here will know the answers to these issues:


Does late payment legislation apply to individuals such as tenants?
If so what interest rate over and above the reference rate can you charge for late payments?
What would be considered a reasonable set of steps (inc timescales) to take when a tenant is overdue paying rent?


Thanks in Advance

Tom

[jeffrey]

If you mean the Late Payment of Commercial Debts (Interest) Act 1998, there's a hint in its title! Here's s.2:

2. Contracts to which Act applies.

(1) This Act applies to a contract for the supply of goods or services where the purchaser and the supplier are each acting in the course of a business, other than an excepted contract.

(2) In this Act “contract for the supply of goods or services” means:
(a) a contract of sale of goods; or
(b) a contract (other than a contract of sale of goods) by which a person does any, or any combination, of the things mentioned in subsection (3) for a consideration that is (or includes) a money consideration.

(3) Those things are:
(a) transferring or agreeing to transfer to another the property in goods;
(b) bailing or agreeing to bail goods to another by way of hire or, in Scotland, hiring or agreeing to hire goods to another; and
(c) agreeing to carry out a service.

(4) For the avoidance of doubt a contract of service or apprenticeship is not a contract for the supply of goods or services.

(5) The following are excepted contracts:
(a) a consumer credit agreement;
(b) a contract intended to operate by way of mortgage, pledge, charge or other security; and
(c) . . .

(6) . . .

(7) In this section:
“business” includes a profession and the activities of any government department or local or public authority;
“consumer credit agreement” has the same meaning as in the Consumer Credit Act 1974;
“contract of sale of goods” and “goods” have the same meaning as in the Sale of Goods Act 1979;
“government department” includes any part of the Scottish Administration;
“property in goods” means the general property in them and not merely a special property.

[jeffrey]

See the Act (http://www.statutelaw.gov.uk/legResults.aspx?LegType=All+Legislation&title=late+payment&Year=1998&number=20&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&TYPE=QS&PageNumber=1&NavFrom=0&activeTextDocId=1455304) for other rules and procedures.

[Lawcruncher]

If you want to charge interest on late rent you have to provide for it in the lease. Four per cent above the base rate of a named clearing bank is usually considered reasonable and anything above that penal and therefore irrecoverable. It is usual to provide for a few days grace.