How to Recover Rent Arrears

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One of the biggest causes of worry for landlords is the accumulation of rental arrears by their tenants. When tenants fail or are unable to meet their rent commitments and it leads to accumulated unpaid rent, it puts landlords in a difficult financial situation.

Knowing how to approach rental arrears and leveraging your rights as a landlord means you can navigate this stressful situation with confidence that you can recover the arrears swiftly without overstepping your tenants’ rights. Here, the landlord experts at AST Assistance explain how to recover rent arrears effectively and lawfully from both current and ex-tenants.

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Importance of clear tenancy agreements

The tenancy agreement is the foundation of any landlord-tenant relationship. A clear and comprehensive tenancy agreement sets the expectations for rent payments right from the outset and removes the risk of ambiguity. The agreement should include clauses related to paying rent, including the amount, due date and method of payment, so that both parties are clear on their expectations prior to the tenancy starting.

The tenancy agreement will outline whether the tenant is entering a joint tenancy, meaning that another person is considered a tenant. In this case, all tenants are responsible for rent arrears. The tenant is only responsible for paying rent from the date their tenancy started. They are not liable to pay arrears owed by the tenant before them. However, if they took over someone else’s tenancy - an ‘assignment’ or ‘succession’ - they could be responsible in some cases. The tenancy agreement should be clear on these circumstances. Throughout the process of dealing with unpaid rent and other rental arrears, meticulous record-keeping is essential. Well-kept records not only strengthen your case in a court hearing but also demonstrate professionalism and adherence to your legal responsibilities.

Communication with tenants

When dealing with outstanding rent, the underlying consideration for landlords is to keep open and honest communication. Upon the first missed rent payment, contact the tenant to discuss the situation, especially if you're dealing with a debt owed. Methods of communication can vary from written correspondence to more direct forms like telephone calls or face-to-face meetings. Keeping a record of all communications can serve as evidence if the situation escalates to a court hearing. If the tenant does not respond to written or call attempts and has a guarantor, contact them too. You should clearly state that the tenancy agreement terms have been broken, and encourage the tenant to get in touch.

Pre-action protocols and rent repayment plans

Before taking any legal steps and incurring legal costs, landlords must be aware of pre-action protocols designed to encourage parties to negotiate and come to an agreement without going to court. For example, if the tenant responds, you should discuss rent repayment plans. While setting up a repayment plan, make sure to establish clear terms, timelines and responsibilities for both parties.

Legal steps for current tenants with no communication or failure to repay

If communication and repayment plans fail, legal action may be an option for many, but it is often still not necessary. The first step should be to issue a formal demand for the unpaid rent. If the tenant fails to respond, landlords can serve a Section 8 notice for possession under the Housing Act 1988. Should a Section 8 notice not result in repaid rent or a plan to rectify the arrears, landlords can escalate the matter to a County Court Judgement (CCJ) and, eventually, a possession order if the money owed remains unpaid. However, many landlords who opt to take matters to court fail to adhere to their rights and responsibilities, or fall short of the timelines and evidence required to build a successful case. Therefore, it is always advisable to consult with experts in landlord assistance who can review your circumstances and advise on the best course of action.

Dealing with ex-tenants

Recovering rent arrears from ex-tenants presents a unique set of challenges. The first obstacle often is tracing their whereabouts. Once the ex-tenant is found, you can issue a formal demand for the owed amount, similar to the process used for current tenants. If the ex-tenant fails to settle the arrears even after being located and issued a formal demand, landlords can take the matter to court. Given that the individual is no longer a tenant, a Section 8 notice would not apply; instead, landlords might need to consider alternative legal avenues. The court can issue a County Court Judgement (CCJ), and if this still doesn't result in payment, enforcement measures like bailiffs or High Court enforcement officers can be engaged, similar to cases involving current tenants. Both dealing with current and ex-tenants involves a series of legal steps, each with its own complexities. Therefore, it is often advisable to seek expert tenancy advice to navigate these processes effectively and within your rights.

Court procedures and alternative dispute resolution

Court proceedings may be the last resort for recovering rent arrears. Landlords initiate a claim by filing papers at a County Court, incurring legal costs in the process. If the court rules in the landlord's favour, a CCJ is issued, granting permission to take enforcement actions such as involving bailiffs or issuing a possession order.

Find expert advice to deal with rent arrears

Navigating the issue of rent arrears is a complex, often stressful task that many landlords unfortunately face at some point. While initial attempts should always focus on an amicable resolution, be it through open dialogue or rent repayment plans, there are clear avenues available for those cases where such efforts prove unfruitful. Landlords must act swiftly but responsibly, adhering to legal protocols throughout the process.

However, prevention is always better than cure. A clear and comprehensive tenancy agreement sets the foundation for a more straightforward path in case you find yourself needing to recover rent arrears. Alongside prompt and professional communication, as well as meticulous record-keeping, landlords can navigate this challenge in the most effective manner possible.

It is not always easy to effectively manage a tenancy and mitigate risks - especially with multiple tenancies in your portfolio. That is why seeking expert legal advice before issues arise to manage your tenancies allows you to oversee your investments and have much of the stress taken away. Should difficulties arise, thanks to the at-hand assistance of tenancy experts, you can be sure that you are dealing with them in the best possible way.

For tailored guidance from experienced tenancy professionals, contact AST Assistance today on 01706 619 954 or fill out our contact form below.

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