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View Full Version : Tenant on HB is in arrears- how best to clear them



kate
23-07-2005, 10:04 AM
Hi I wonder if anyone can give me any advice on rent arrears?


I stopped work and had to claim housing benefit, during this time I got into some arrears of £700 now my housing benefit is all sorted and I have been paying £25 weekly into his bank the outstanding balance is £400 my lanlord was fine about this but now he has sent me a letter demanding the whole sum or intrest will be charged monthly. I am really worried as I can only just afford the £25 a week that I pay off the debt. can I ask the landlord to deduct my £200 deposit off the money I owe so the intrest he charges will be less. anyadvice would be a big help please.

davidjohnbutton
23-07-2005, 10:24 AM
You can ask, but the landlord does not have to agree. However, you may be worrying a little unnecessarily since the interest at the current statutory rate (which is what he would be able to claim if he went to court) is only 8% - so for a year - that would amount to an extra £32 or £2.66 a month - not a magnificent sum - and you would anyway be reducing the arrears steadily.

kate
23-07-2005, 10:40 AM
I have read the letter again and it states

All arrears will now be subject in interest at 4% over the current base rate. This will be due immediately if unpaid for 14 days.

Current bank of england base rate: 4.25%
interest charged on your account: 8.25%

Interest to be charged next month if not paid within 14 days is £33


That is a copy of what the letter says does that sound right to you? it looks like he is charging the interest monthly. Thanks

zoe
23-07-2005, 12:22 PM
if your debt is £400 then £33 is nothing like 8% interest.

Your LL has worked this out wrong.

I think the calculation is something like

400/100 * 8/12 = 2.60 ish.

You divide the ineterst rate by 12 to give a monthly rate. Tell him has has worked this out wrong.

davidjohnbutton
23-07-2005, 14:58 PM
If your landlord is charging 8.25% per month, then this equates to an annual percentage charge of 99% - totally unacceptable and unlawful!

It looks to me like he is charging in this manner (i.e. £400 @ 8.25% = £33.00) and applying a charge of £33 per month or £396 a year. He would never get this through court!!!!!!

Have a look in your rental agreement - is there a clause in there which permits interest charges for late payment - if not, then all he can do is charge the 8% p.a. currently allowed under the County Courts Acts.

kate
23-07-2005, 15:51 PM
My Rental agreement ran out in January,and It is in the loft so wont b able to get it for few days. Does the agreement being over make any diff?

kate
23-07-2005, 21:37 PM
My landlord has just emailed me to say that he can charge 8.25% pcm can this be true.

davidjohnbutton
23-07-2005, 21:45 PM
No, he cannot charge you 8.25% per calendar month - as I said before, its 8.25% (subject to there being a clause in the tenancy agreement) PER YEAR.

You calculate it like this £400x8.25 divided by 100 = £33.00 which you then divide by 12 for the number of months - so its £2.75 per month interest on £400.00

Tell your landlord to go and buy a calculator and get it right!!!! He is clearly failing to realise that he is not dividing his calculation by 12 months or 365 days.

kate
23-07-2005, 21:49 PM
Thats what I thought

Energise
23-07-2005, 21:54 PM
No, he cannot charge you 8.25% per calendar month - as I said before, its 8.25% (subject to there being a clause in the tenancy agreement) PER YEAR.

You calculate it like this £400x8.25 divided by 100 = £33.00 which you then divide by 12 for the number of months - so its £2.75 per month interest on £400.00

Tell your landlord to go and buy a calculator and get it right!!!! He is clearly failing to realise that he is not dividing his calculation by 12 months or 365 days.


No the interest would be less than that, she paying off £25 per week so after the initial 14 days the landlord has said, £350 will be outstanding the following month £250 will be outstanding etc, total interest payable would be around a fiver, but would be dependent on specific dates.