Evicting a tenant due to rent arrears – A practical guide.

When a tenant falls into rent arrears it can be a frustrating and worrying time for landlords.  It is very important to address the situation as quickly as possible.  If you are a landlord in this situation you should talk to your tenant first and explain that the situation is unacceptable.  If a debt has already accrued, your tenant is likely to be in breach of the tenancy agreement and you may need to consider beginning the eviction process.

It is worth noting that being evicted from your home can be very traumatic; it is most likely that if the tenant had been able to pay the rent most would have done so. Thus, the situation needs to be handled sensitively. We are often approached by landlords who are under the impression that if they evict their tenant/s, the tenant will be liable for all costs incurred.  In our experience very few landlords are able to recover costs, or even get the unpaid rent.

Unfortunately, the eviction process can be costly and time consuming.  If a previously good tenant has fallen into arrears because of a short term issue that can be resolved we would advise you to be lenient.   For example; allowing the tenant to resume normal payments and make contributions towards the arrears over a longer term.  However, if there are repeated missed payments or rent arrears greater than two months rent,it is probably time to consider eviction.

If a tenant fails to pay the rent, there are two types of court action that can be used:

  • Accelerated possession as set out in Section 21 of the Housing Act 1998
  • A fixed date action can be taken using a Rent Arrears Ground.  You will be required to attend a hearing after the court order

Obtaining possession through the accelerated method as set out in Section 21 has the advantage of being cheaper as no court hearing needs to take place, and this also reduces the time it takes.  This action can be taken when a written tenancy agreement or assured shorthold tenancy (AST) is in place.  A 21 day notice has been served and a 2 month period following notice has expired.

Alternatively, if rent arrears exceed the value of two months rental payments, The Rent Arrears Ground method can be used.  This process requires a Section 8 notice to be served; also known as a “notice to quit”.  Once the 2 week’s notice period has expired, the landlord can then apply for a possession order.  The court will set an initial hearing date where the landlord will be required give evidence of the arrears.  If the possession order is granted it takes effect fourteen days after it has been issued (although this can be extended to six weeks in some circumstances).

The costs will vary from case to case, depending on what action is taken.  The costs can include; issuing an application for possession costs £280, a possession claim online (PCOL) (which is slightly cheaper) £250, a warrant of possession  £110.  For most landlords the loss of rental income during this period will also be substantial, not to mention the time and resources expended.

Evicting a debtor can be a difficult and protracted process, but it is the only way to legally remove a problem tenant. The burden and stress can be reduced by using a professional company such as ourselves (there are other companies available). It is of course possible to do it yourself. More information can be obtained here: https://www.gov.uk/private-renting-evictions/rules-your-landlord-must-follow.

 

Housing Shortage, Empty Homes, and National Debt.

England’s housing provision is in crisis. There are currently 1.7 million people on housing waiting lists.  Repossession and homelessness are at record levels.  Overcrowding and poor living conditions commonplace.  Clearly the coalition’s plan to build 150,000 new homes over the course of the next four years, will be insufficient.

Are new homes the answer? It is estimated by Shelter the housing charity that there are currently over 1 million empty homes (over a third of these have been empty for more that 6 months).  It is important to note that these figures are derived from Council Tax records; and do not include uninhabitable or homes due for demolition.  Nor do the statistics include flats above shops.  More in depth facts and figures can be obtained here.  The vast majority of empty homes are privately owned.  Click here for an interactive map of empty homes provided by Shelter.

There are multiple reasons why a property may be empty.  Some perfectly legitimate such as a pending change of ownership, or in some instances the owners may need to move due to care needs.  However, there is a more insidious group of private owners and property companies who land bank large portfolios as long term investments. This is where new legislation is required.

Efforts are being made to tackle  the problem; the government has introduced an empty homes grant, which will be rolled out later this year more information is available here .  Councils are being encouraged to charge higher council tax rates on empty properties, and are offered incentives to bring their own empties back into use.

These are by no means new observations in fact Channel 4 aired “The Great British Property Scandal” Nov 2010 fronted by the architect George Clarke.  This was the launch of a national campaign to encourage the reporting of empty property.   So far nearly 10,000 people have taken the time to report an empty property.  If you  are interested in this campaign more information can be found here.

A final thought; approximately one hundred and fifteen billion pounds is tied up in the value of empty homes in England (that’s the equivalent of 8% of Britain’s £1.5bn national debt).  Or to put it another way the equivalent of the UK’s  whole public sector net borrowing for an entire year.

References

http://www.emptyhomes.com/what-we-do-2/campaign-demands/campaign-demands-2/

http://england.shelter.org.uk/campaigns/why_we_campaign/the_housing_crisis

http://www.insidehousing.co.uk/tenancies/website-identifies-housing-need/6526606.article