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Sep, 2014

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  1. #1
    Join Date
    Sep 2005
    Posts
    121

    Default Tenant in arrears with rent- what Notices can I serve?

    I have a tenant who signed a 6 month AST on 7th August 2007, so the tenancy is now periodic. He agreed to pay the monthly rent directly into my bank account and this happened for the first two months. Every month since, he has never paid the rent by the due date and each month, I have to contact him, go to the property, get the rent and take it to my bank. Don’t get me wrong, this is no great problem but this month once again the rent was late. I tried to contact him several times but he wouldn’t answer his phone to me. I texted him and put a couple of notes through the door and finally managed to catch him at the property. He said he didn’t have the rent but asked for a few more days and said he would have the rent on Wednesday 19th. I (reluctantly) said ok and tried to contact him on the Wednesday and the Thursday but couldn’t get hold of him. I eventually got to see him on Friday 21st but again, he said he didn’t have the rent and asked for more time. He wanted until Wednesday 26th and I said that if he did not pay the rent due in full by Tuesday 25th, that I would be giving him notice.

    He did admit that he is now finding the rent a bit of a struggle but particularly this month as he has had a couple of bills in and he asked if his friend could move in, so they could split the cost of the future rent paments down the middle. The current tenant works full time but his friend doesn’t work, so he would be claiming HB, which I am not too sure about, as I have never dealt with this before.

    I have a number of options as I see them:-

    Option 1.
    If he doesn’t pay the rent in full on Tuesday then I issue him notice.
    How do I do this correctly. Is it by S21 or some other means? I think my AST refers to Section 8 for rent arrears?
    I assume that I still need to give 2 months notice even if the tenant is not up to date with the rental payments?

    Option 2.
    If he does pay the rent in full on Tuesday, then I see what happens next month but in the meantime maybe think about asking for a Guarantor (I have posted about this specifically on a separate post). As I said earlier, the AST is now periodic. If I requested that the existing tenant provide a Guarantor, would that mean that a new AST would need to be signed or could the existing AST be altered and resigned? I am mindful that if a new tenancy is signed, the tenant has already made late payments but having a Guarantor in place would at least give me some confidence in finally receiving payment if the tenant defaulted.
    In addition to this, could I issue the tenant notice on Tuesday (by whatever means I need to S21,S8 See above)? and then, assuming I have to provide 2 months notice, if he doesn’t pay next month, at least I am partly into the notice period? If he subsequently pays on time, then the notice could be rescinded.

    Option 3.
    Again, if he comes up with the rent on Tuesday, I have a decision to make regarding his friend who wants to move in also. I sent him a tenant application form, downloaded from this site and I am awaiting its return. If he is moving in, he wants his name on the tenancy for his HB.
    Assuming that the existing tenant is also remaining, would I be better putting the tenancy in both names or just the one name ie the new tenant who is not working? If I have it in both names do I need to write a clause into the tenancy that each tenant is jointly and severally responsible/liable for all aspects of the tenancy?
    Am I putting myself at any greater risk, if I just have the new tenants name only on the AST given that he is not currently employed, rather than both names?

    Sorry it’s a ‘bit’ long winded but hope you can take the time to respond.

    MR M

  2. #2
    Join Date
    Feb 2005
    Location
    Hampshire
    Posts
    6,065

    Default

    Don't waffle. Either serve a S.21 or S.8 Notice, or both. There's bags of info on the forums so just start looking!
    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

  3. #3
    Join Date
    Sep 2005
    Posts
    121

    Default

    Sorry Paul_f but I do not see explaining the specifics of my predicament as 'waffling', but you are of course entitled to your opinion.

    Posters are often critisised for not providing sufficient information to allow the more experienced posters to accurately provide answers or comment upon the OP's dilemma. I trust that I have provided such sufficient information and that I will hopefully receive some more constructive responses.

    MR M

  4. #4
    Join Date
    Sep 2006
    Location
    Sheffield
    Posts
    39,409

    Default

    Quote Originally Posted by MR M View Post
    Option 1.
    If he doesn’t pay the rent in full on Tuesday then I issue him notice.
    How do I do this correctly. Is it by S21 or some other means? I think my AST refers to Section 8 for rent arrears?
    I assume that I still need to give 2 months notice even if the tenant is not up to date with the rental payments?
    You can serve a s.8 Notice if he is in arrears. See text of grounds 8, 10, and 11 as to which applies.

    Quote Originally Posted by MR M View Post
    Option 2.
    If he does pay the rent in full on Tuesday, then I see what happens next month but in the meantime maybe think about asking for a Guarantor (I have posted about this specifically on a separate post). As I said earlier, the AST is now periodic. If I requested that the existing tenant provide a Guarantor, would that mean that a new AST would need to be signed or could the existing AST be altered and resigned? I am mindful that if a new tenancy is signed, the tenant has already made late payments but having a Guarantor in place would at least give me some confidence in finally receiving payment if the tenant defaulted.
    In addition to this, could I issue the tenant notice on Tuesday (by whatever means I need to S21,S8 See above)? and then, assuming I have to provide 2 months notice, if he doesn’t pay next month, at least I am partly into the notice period? If he subsequently pays on time, then the notice could be rescinded.
    You could opt for either new AST or to let existing tenancy run on as periodic. In either case, you could ask for a guarantor (but insist on Deed of Guarantee). If T refuses this, take steps to end existing tenancy by serving s.21 Notice.

    Quote Originally Posted by MR M View Post
    Option 3.
    Again, if he comes up with the rent on Tuesday, I have a decision to make regarding his friend who wants to move in also. I sent him a tenant application form, downloaded from this site and I am awaiting its return. If he is moving in, he wants his name on the tenancy for his HB.
    Assuming that the existing tenant is also remaining, would I be better putting the tenancy in both names or just the one name ie the new tenant who is not working? If I have it in both names do I need to write a clause into the tenancy that each tenant is jointly and severally responsible/liable for all aspects of the tenancy?
    Am I putting myself at any greater risk, if I just have the new tenants name only on the AST given that he is not currently employed, rather than both names?
    If person2 is to be admitted as second occupant, decide whether:
    a. new AST in joint names;
    b. existing tenancy to be assigned (by Deed of Assignment); or
    c. you as L give consent to person2 as permitted occupier only- but you would then have no contractual rights against him.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

  5. #5
    Join Date
    Mar 2008
    Posts
    224

    Default

    Hi Mr M,

    Only to throw something different into the fire. Myself personally I would rent the property by the room, get the existing tenant to sign up to a License agreement and also let the friend move in and rent him the other room on HB. I would ensure the license agreement is water tight. The benefit of this is that if the tenant fails to pay the rent you can then evict him without the needs of going through the courts. The housing benefit angle is quite good, it can take anything from 4weeks to 12 weeks to start comming through, however you can request a payment from them within 14days of the tenancy commencing. It all depends on how much rent you will get by the room. If you want to send me the postcode i'll check housing benefit rates for you just now. Please remember the housing benefit system changes this comming month. Claims will now be assessed differently.

    Derek

  6. #6
    Join Date
    Sep 2005
    Posts
    121

    Default

    Well D day has arrived and guess what......I can't get hold of the tenant (Shock!)

    Thanks for your responses Jeffrey and Derek. I have had a look at the S8 grounds and in my case, I interpret them as follows:-

    Mandatory Ground 8.
    The rent arrears would need to be £920 before I can Issue the S8 under Ground 8 (Mandatory grounds for possession). Is this correct ?
    The tenants rent is paid in arrears and it is up to date upto and including 5th March 2008. Assuming he pays me nothing, would the earliest date that I could issue the S8 under Ground 8 be 6th May 2008 (at which point he would owe me two months rent @ £460pcm)
    Is the tenant under any legal obligation to vacate the property either before or on the day that the S8 under ground 8 has been issued? If not what date does he have to vacate the property by?

    Discretionary Ground 10 and 11.
    Both apply in my case and I assume that I can issue a S8 under grounds 10 and 11 today. Is this correct?
    On what date would the tenant be legally obliged to vacate the property if I did issue the S8 today?

    Or am I misunderstanding that the issue of a S8 under whatever grounds is not for possession but is simply a notification to the tenant that I intend to persue a claim for the outstanding rental monies through the courts?

    Regardless of the Issuing of an S8, should I also be issuing the tenant with an S21 today as well as the S8 and if this is correct, how long does the tenant have before he legally has to vacate?

    MR M

  7. #7
    Join Date
    Sep 2006
    Location
    Sheffield
    Posts
    39,409

    Default

    Quote Originally Posted by MR M View Post
    Mandatory Ground 8.
    The rent arrears would need to be £920 before I can Issue the S8 under Ground 8 (Mandatory grounds for possession). Is this correct ?
    The tenants rent is paid in arrears and it is up to date upto and including 5th March 2008. Assuming he pays me nothing, would the earliest date that I could issue the S8 under Ground 8 be 6th May 2008 (at which point he would owe me two months rent @ £460pcm) .
    No. If rent falls due on 6th of month, and T pays nothing more after 5 March, you can use g8 as from 7 April (because, by then, T will have failed to pay on 6 March and 6 April; there'll therefore be at least two months' rent in arrears).
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

  8. #8
    Join Date
    Sep 2005
    Posts
    121

    Default

    Quote Originally Posted by jeffrey View Post
    you can use g8 as from 7 April
    Thanks Jeffrey, helpful as ever. Is g8 a typo or a different form to the s8?

    I would also appreciate any advice on the other points which I raised also. Many thanks.

    MR M

  9. #9
    Join Date
    Sep 2006
    Location
    Sheffield
    Posts
    39,409

    Default

    Quote Originally Posted by MR M View Post
    Thanks Jeffrey, helpful as ever. Is g8 a typo or a different form to the s8?

    I would also appreciate any advice on the other points which I raised also. Many thanks.

    MR M
    Sorry: it's ground 8 (one of the eighteen s.8 grounds, as set out in Schedule 2 to the Housing Act 1988).
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

  10. #10
    Join Date
    Jan 2005
    Location
    Midlands
    Posts
    2,216

    Default

    I strongly suggest that, unless tenants are hard to find for your property, you get rid of this tenant as quickly as possible and find another. These rent problems will never go away with tenants like this and I have fallen for the "can I move a friend in to help me with the rent" busimess before. I would issue a section 21 notice as soon as possible and a section 8 notice (including grounds 10 and 11) as well. Neither affects the other, but of course the section 8 only requires you to give two weeks notice. The snag is that if, before the mandatory court hearing, he reduces his rent arrears below two months, the action will fail. With S21 you have to give at least 2 months notice, but provided you get the paperwork right, your possession order should be forthcoming.

    P.P.
    Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

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