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Markatthepub
09-05-2007, 19:03 PM
Hi,

I have a tenant who owes about £1000 in rent. This comes from the rent being a bit short each month.

I don't wanmt to evict but I do want to start charging interest at 8% pa. This is allowed for in the AST.

Is it simply a matter of calculating 1000 * 8%/12 to give me the monthly interest. I then add that to the outstanding debt next month?

thanks
Mark

Markatthepub
09-05-2007, 19:58 PM
Fair comment, I'll change it in the next AST

Miffy
10-05-2007, 05:43 AM
Hi,

I have a tenant who owes about £1000 in rent. This comes from the rent being a bit short each month.

I don't wanmt to evict but I do want to start charging interest at 8% pa. This is allowed for in the AST.

Is it simply a matter of calculating 1000 * 8%/12 to give me the monthly interest. I then add that to the outstanding debt next month?

thanks
Mark

The trouble is that this interest is peanuts-under £7 per month! Is it worth it? I would recommend adding a "late fee" into your contract and charging for reminder letters every 2 weeks or so that the rent remains in arrears.

On another note, if you peg your interest charges to a bank's base rate, that just leads to more hassle for you to keep those records-especially when the rates are changing all the time as they are at present.

attilathelandlord
10-05-2007, 09:41 AM
Just get rid of them! Why on earth do you want to hang onto a tenant who is not paying the full whack?

cillitbanger
10-05-2007, 20:18 PM
i think you will find this is a bit of a grey area, i belong to the consumer action group and when reclaiming bank charges we are told we can only claim the 8% int from when the charge occurred.
so basically you can only claim interest on the underpayment at the time it occurred i.e if your tenant say pays you £450 a month when the full rent is £500 then you can only claim 8% on the £50 from the day it was due.
Not on the £1000!

Paragon
10-05-2007, 20:54 PM
So, as I understand it, he short changes you every month by not paying the full agreed rent. Is that right?