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Rent Arrears & Evictions

Assured Shorthold Tenants - how to evict them if they are in arrears with rent

This article on eviction and possession procedures when in rent arrears has been supplied to LandlordZONE by Tessa Shepperson who is a solicitor and runs Landlord Law http://www.landlordlaw.co.uk  the popular online legal service for landlords and tenants.

First things first

Keep an eye on your tenants rent payments.  You need to catch them when they first fall into arrears.  If you allow the arrears to run up, they may quickly reach a stage where eviction is the only answer.  However prevention is always better than cure. 

As soon as the tenant fails to pay you need to contact them and speak to them about it.  Maybe it is a mistake by their bank, in which case this can be sorted quickly.  However, if there are in financial difficulties the sooner you know about it the better.

With good tenants who you would like to retain, you may want to consider giving them a temporary rent reduction, for example (if they have lost their job) until they are able to find new employment. It may also be a good idea to serve a section 21 notice at this stage (depending on how long the fixed term has to run) as a precautionary measure.

If you are able to reach agreement with your tenants, this should be set out clearly in a letter so everyone knows where they stand.
If however the tenants have not contacted you or are evasive, and the rent arrears reach two months worth, then you will have no option but to consider court proceedings for eviction.  Unless you are willing to let them stay there rent free!

Court proceedings

There are two types of court proceedings which are most commonly used when tenants are in arrears of rent. These are:
1. under the shorthold ground set out in s21 of the Housing Act 1988 using the accelerated possession procedure (where the order is made on the paperwork and there is no hearing)
2. under the rent arrears ground (ground 8) using the 'normal' fixed date procedure (where a court order can only be made after a court hearing which you or your agent will have to attend to give evidence)

Criminal Offence to Harass Tenants

Landlords should note that it is a criminal offence to evict tenants other than by court action
Tenants often either promise payment or say that they are leaving on a particular date. It is best not to rely on these promises (unless you are certain that the tenant can be trusted) as if they are not kept the landlord can end up suffering heavy financial losses.

Possession Notices (Section 21 and Section 8 etc) should always be served as a precautionary measure, and if no payments have been made on expiry of the notice period, legal proceedings should be issued promptly:

1. Accelerated Possession Procedure

This can only be used where:

• the tenancy is an assured shorthold tenancy (AST)
• there is a written form of tenancy agreement
• a valid form of section 21 notice has been served on the tenant
• the notice period (minimum two months) in this notice has expired, and
• the fixed term of the tenancy has ended

You can then use the special accelerated possession procedure form, and make sure that copies of all relevant documents are sent to the court.

If successful, you will get:

• an order for possession.
• an order that the tenant pay fixed costs.

The advantage of this type of procedure is that it is quicker, there is (normally, if all your relevant paperwork is in order) no court hearing, and if you are using solicitors, the legal costs will be less. However you will not get a CCJ for rent arrears, just the order for possession.

2. Under the Rent Arrears Ground

This should be used where there are rent arrears of a total value of more than two months worth (i.e. for a rent of £600 per month the arrears are £1,200 or more).
You will need to serve a 'section 8' notice in the prescribed form before issuing proceedings and the notice period of two weeks must have expired.
You should then use the 'normal' possession proceedings (known as a 'fixed date' action) and the court will set the case down for a hearing, which you will have to attend. You will need to give evidence to the court of the rent arrears due at the date of the hearing.

Obtaining a Possession Order - what you should get:

• an order for possession.
• a money judgement for the rent arrears due at the date of the court hearing.
• an order that the tenant pay you an 'occupation rent' (also known as 'mesne profits')
• an order that your tenant pay your legal costs, which will be assessed by the Judge at the hearing.

Which Possession Procedure Should I Use?

Here are some points to consider when making your choice:

• If the paperwork is correct, a tenant cannot prevent you obtaining possession under the shorthold ground.
• You cannot use the accelerated procedure however to claim rent and obtain a money judgement.
• you will not be able to obtain a possession order when using the rent arrears ground if the rent arrears are paid (e.g. by Housing Benefit) before the hearing date. This is all right if you simply want the rent, but may be annoying if you actually want the tenant to go.
• If getting possession is more important than being paid the rent, you might wish to consider serving a section 21 notice and waiting for the longer notice period to expire, and then using the accelerated possession procedure so you can be certain that you will get a possession order.
• This would also be a better course of action if there is a possibility that the tenant will raise a defence and counterclaim for compensation on the basis that the property is in poor repair.
• It is usually very difficult if not impossible to enforce a money judgement against tenants after they have left the property. Frequently this is only possible if they are working and an attachment of earnings order can be obtained.
• However, if your tenant is working and you are certain that they will continue to be employed after eviction, then this would be a reason to chose the fixed date rent arrears procedure.
• You will have to use the fixed date procedure if the tenant is not paying rent and the tenancy still has several months or longer to run, as you cannot evict under the shorthold ground during the fixed term. Otherwise your financial losses could end up being extremely serious.

Possession Procedures for Other Tenancies

• If your tenant is not an assured shorthold tenant, or if there is no written tenancy agreement, you will have no option but to use the fixed date procedure.
• If the tenant is a protected or statutory tenant under the Rent Act 1977 (generally if the tenant first took on the tenancy before 15th January 1989) different rules apply and you should take legal advice.
• If the tenant has a common law tenancy (e.g. where there is a resident landlord in the same building, the let is a company let, or the annual rent is more than £100,000), again, different rules will apply and you should take legal advice

Tessa Shepperson is a solicitor, and runs Landlord Law, an online service for residential landlords and tenants at www.landlordlaw.co.uk.  Here Landlords can instruct Tessa online to evict tenants  http://www.landlordlaw.co.uk/repossession-services-landlord-law for fixed fees, or purchase her ‘do it yourself’ kits http://www.landlordlaw.co.uk/open/std/landlord-law-online-kits .   Further information specifically on rent arrears can be found in her Rent Arrears Action Plan http://www.landlordlaw.co.uk/rent-arrears-action-plan

Tessa is also the author of "Do it Yourself Residential Lettings" and "Renting: The Essential Guide to Tenant's Rights" published by Law Pack Publishing Ltd.  

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