Tenant admits he is broke, is it worth pursuing?

[remyrobson]

One of my tenants fell into 6 weeks arrears 2 weeks ago, we issued him with a breach notice as he was not answering phone calls, or emails and I found he had advertised the room to sublet.
The house is a 4 bedroom terrace, over 3 floors. It has all necessary fire doors and smoke alarms wired to the mains. It was fire inspected when the attic was converted 3 years ago.
He was on an individual 1 year AST commencing July 2009. Rent was only £150pcm for a small single room.

Today, I received the following email:

I apologise for replying so late to your breach notice. I have been seeking my
own legal counsel. I am financially insolvent at the moment. To the extent that
I will be unable to raise the funds to pay your rent by the 22nd.

I understand that as I can prove irrevocably that I have not resided in the
property I am not liable for the costs, such as electricity bills incurred etc
regardless of what the contract states.

I also understand that I should ask you to provide proof that will stand up in a
court of law of any costs you have incurred while trying to find another tenant
for the property before being held accountable for them.

Finally I realise that I am wholly liable for the rent on the property. As I am
unable to pay the amount I also realise that I am likely to see an action in a
civil court. I have been advised once these proceedings have begun, to ask
Sheffield City Housing to visit the property and determine whether it was legal
for it to be rented out in the first place. I understand it is illegal to rent
a property commercially without smoke detectors in every single room for
example. I will then continue the matter in a civil court pending their
results. Frankly as I already have a court order affecting my monthly income
and will have for the next 9 months I do not see this issue being resolved
quickly.

I will have the keys returned to you asap


To clarify:
- I understood he was rarely at the house, therefore he was never asked for bills. The tenants agreed this amongst themselves.
-He is liable for council tax, the other tenants have told me he has lots of bills from council in his name.
- We have all certificates needed. eg. gas safety, EPC, planning/fire regs.
-Deposit is protected
-He owes just under £500 as he under payed for last month we received a payment. Other payments were sporadic.
-We have landlord insurance including legal cover.
-I have never asked him for the cost of re-advertising, simply because I was advertising it anyway for the coming months.

My questions are:
Have we done anything wrong?
Is it worth pursuing this in court?
By surrendering his keys does this mean he is surrendering room and how does this impact on the situation?

I've never had to pursue a tenant in court before, but it seems like an unnecessary stress for such a relatively small amount when he already apparently has court judgements (he didn't have these when contract commenced).

I'm sorry if this email is a bit long, I hope I've included all relevant information.

Thanks for reading!

[westminster]

My questions are:
Have we done anything wrong?
Doesn't sound like it. I don't know HMO rules, but it sounds like you are fully conversant with them.


Is it worth pursuing this in court?
That depends on how much he owes you, and whether he has the means to pay, if not now, sometime in the next few years (because you can enforce a county court judgment up to six years afterwards).


By surrendering his keys does this mean he is surrendering room and how does this impact on the situation?
T giving back the keys is not in itself enough to constitute a surrender. You, as LL, have to accept the surrender, either by words or actions, or by signing a formal deed of surrender. For example, if you let out the room again, that action would be strong evidence that you'd accepted a surrender as of that point.

Note that, in the case of a tenant leaving before the end of the fixed term, you have no obligation to mitigate by attempting to find a new tenant. In the absence of a surrender either by deed or by 'operation of law' (e.g. such as you reletting the room to someone else), the T remains liable for rent for the whole of the fixed term because it's a debt, and not affected by the duty to mitigate loss or damage.

Also note that with regard to the T's assertion regarding bills, whatever is stated in the contract applies - nothing is 'regardless' of the contract. He is talking rubbish and his understanding of the law is either naive or disingenuous.


I've never had to pursue a tenant in court before, but it seems like an unnecessary stress for such a relatively small amount
Personally, I would go for it if I knew the tenant's new address or could find it easily via a tracing agent etc. But I take a zero tolerance attitude and I've pursued claims before which makes it easier, so that's just me.

I'd also do it because I find the tone of the tenant's email really creepy, arrogant and unpleasant. Don't let him intimidate you.

Issuing a county court claim is very easy using Money Claim Online. Just send a letter before action to the T first. Yes, pursuing a claim is a hassle, and the whole thing is long-winded, but it's also an opportunity to learn about the procedure - as a LL you may experience other situations in which it's necessary to make a claim so you may as well start now. You may find it useful to buy a book on the small claims procedure - the one I use is by Patricia Pearl, available on amazon.

[Preston]

The decision is obviously yours, but I am with Westminster; I don't think I would give up at this stage.

My guess is that the "legal counsel" your tenant refers to is sitting on a shelf in a library somewhere and that he (your tenant) didn't get past the first couple of chapters. Much of what he says is nonsense. Essentially the letter appears to be a poorly disguised attempt to intimidate you.

On a positive note he very helpfully accepts liability for the full rent.

[Izzycam]

Thank you Westminster, for the book tip.

[quarterday]

there's not much point going to the expense of a money judgement if at the end of the day you are not going to collect any money from the tenant. get the keys back and start again

[westminster]

Remyrobson, I’ve looked back on a few of your posts and it seems you have a history of high tolerance of poor behaviour from tenants – your comments about a couple of previous tenants include “we’ve been such doormats’, “he’s taking the mick a bit”, “After being very reasonable about him owing 10 months rent”, “sick of being a doormat”.

You sound like a good landlord who is fully aware of your legal obligations, however, being soft on tenants is liable to result in them taking advantage of you. They know they can spin you a hard-luck story and you’ll put up with it. So they think great, I don’t really have to pay the rent; she won't evict me or chase me for arrears.

It’s not a case of being a mean, nasty landlord, just practical and business-like. Remember you’re running a business, not a charity. If a tenant doesn’t pay the rent, serve notice, then start proceedings to evict and/or pursue arrears. The tenant has the opportunity to pay the arrears before the eviction takes place, and that’s their responsibility

I think you should consider pursuing this particular tenant through the county court if only as an exercise in landlord empowerment and awakening the ruthless business-like side of your nature.

[remyrobson]

Thanks for the advice Westminster, I've been thinking about what to do all day at work and his email has really annoyed me.
I think he fully expects to be pursued in court and is trying to scare us off. Is there any point in trying to agree a payment schedule? How should I reply to his email? Should I answer his points and make it clear I know he's talking rubbish?

I am a bit of a doormat, it comes from years of working for the NHS :rolleyes:

[westminster]

I apologise for replying so late to your breach notice. I have been seeking my
own legal counsel. I am financially insolvent at the moment. To the extent that
I will be unable to raise the funds to pay your rent by the 22nd.

I understand that as I can prove irrevocably that I have not resided in the
property I am not liable for the costs, such as electricity bills incurred etc
regardless of what the contract states.

I also understand that I should ask you to provide proof that will stand up in a
court of law of any costs you have incurred while trying to find another tenant
for the property before being held accountable for them.

Finally I realise that I am wholly liable for the rent on the property. As I am
unable to pay the amount I also realise that I am likely to see an action in a
civil court. I have been advised once these proceedings have begun, to ask
Sheffield City Housing to visit the property and determine whether it was legal
for it to be rented out in the first place. I understand it is illegal to rent
a property commercially without smoke detectors in every single room for
example. I will then continue the matter in a civil court pending their
results. Frankly as I already have a court order affecting my monthly income
and will have for the next 9 months I do not see this issue being resolved
quickly.

I will have the keys returned to you asap


Dear Tenant,

Thank you for your email dated [...]th February 2010. Please note that I do not accept an early surrender of the tenancy and I note your admission that you accept liability for rent for the remainder of the fixed term. You are also liable for utilities costs etc as per the terms of the tenancy agreement, which makes no provision for absences from the rental property.

The property is fully compliant with with all safety regulations, and you are most welcome to verify this with the relevant authority.

Please pay the rent arrears in the sum of £x within seven days, failing which I will initiate county court proceedings against you.

Regards,

Nice Landlady