In the world of property rentals, payment of rent is what keeps a landlord's business afloat and provides the tenant with the security of a roof over their head. However, in the unpredictable landscape of life, financial challenges and unforeseen circumstances can lead to rent arrears.
In this article, we'll explore the common causes of rent arrears, legal implications, and strategies for both parties on this challenging and sensitive issue.
What are rent arrears?
Rent arrears in the UK refer to the amount of rent that a tenant owes to their landlord because they have not paid it on time or in full as laid out in their tenancy agreement. Rent arrears typically happen when a tenant falls behind on their rent payments.
Rent arrears can result from many things, including financial difficulties, personal issues, or disputes with the landlord. Arrears can accumulate over time if the tenant consistently fails to make rent payments. The total amount of arrears is the sum of all missed payments.
Eviction and other legal proceedings can be initiated by the landlord if the arrears are not addressed, but these proceedings must follow the proper legal channels, including providing notice and obtaining a court order.
Tenants facing financial difficulties due to rent arrears should seek advice from organisations that can provide financial guidance and support.
To get the low down on your rights as a tenant in law, check out our guide to the Landlord & Tenant Act.
How long can you have rent arrears?
The duration of rent arrears can vary depending on the specific circumstances, the terms of the tenancy agreement, and the actions taken by both the tenant and the landlord.
Rent arrears typically begin to build up when a tenant fails to make their rent payment on the due date specified in the tenancy agreement. Rent is typically due on a monthly basis, but the specific due date is outlined in the tenancy agreement.
The duration of rent arrears can vary based on how frequently a tenant fails to make rent payments. Arrears can accumulate from a single missed payment, or they can result from repeated instances of non-payment.
What are the consequences of being in rent arrears?
Being in rent arrears can have various legal consequences for tenants. These consequences can vary.
Some common legal consequences of being in rent arrears include:
Notice from the Landlord: The landlord may issue notices to inform the tenant of the outstanding rent and request payment. These notices can vary in form and may include a Section 8 Notice (if seeking possession) or a Section 21 Notice (if not seeking possession).
Rent Arrears Recovery: Landlords can use the Rent Arrears Recovery (RAR) procedure to recover arrears. This allows them to deduct arrears from a tenant's Universal Credit, Jobseeker's Allowance, or Employment and Support Allowance.
Late Fees and Interest: Some tenancy agreements may include provisions for charging late fees or interest on overdue rent. The terms and rates should be clearly outlined in the tenancy agreement. Landlords can charge these fees and interest if specified.
Credit Report Impact: Being in rent arrears may negatively impact a tenant's credit report, making it difficult to obtain credit in the future, such as loans or credit cards.
Difficulty Finding New Accommodation: Landlords and letting agents often conduct reference checks on prospective tenants. Having a history of rent arrears can make it challenging to secure a new tenancy.
Homelessness: If a tenant is evicted due to rent arrears and has nowhere else to go, they may become homeless. In such cases, local authorities have a duty to provide assistance.
Financial Consequences: Tenants who face legal proceedings for rent arrears may incur additional costs, such as court fees and legal fees. These costs can add to the financial burden.
It's essential for tenants to address rent arrears promptly to avoid the escalation of legal actions and potential eviction. Communication with the landlord is crucial, and tenants should seek assistance and advice if facing financial difficulties that prevent them from paying rent.
How many months in arrears before eviction?
The number of months a tenant can be in arrears before facing eviction can vary depending on the type of tenancy and the terms of the tenancy agreement.
For most private residential tenancies, which are typically Assured Shorthold Tenancies (ASTs), eviction proceedings can be started if the tenant is at least two months in arrears.
This means that if a tenant is two or more months behind on their rent, the landlord can serve them with a Section 8 Notice, which is a notice seeking possession of the property based on rent arrears. The tenant will then have a specified period to clear the arrears or reach an agreement with the landlord.
The notice period provided in a Section 8 Notice can vary based on the grounds for possession, but in most cases, it's usually two weeks' notice.
However, if the tenant pays off the arrears within this notice period, they may avoid eviction.
How to deal with rent arrears
Landlords
Dealing with rent arrears as a landlord can be a challenging and sensitive process. It's important to follow the legal procedures and maintain open communication with the tenant while addressing the arrears.
Our top tips:
Open and respectful communication is key. Contact the tenant as soon as they fall into arrears to discuss the situation. In some cases, tenants may be facing temporary financial difficulties and are willing to resolve the issue. Listen to the tenant's reasons for the arrears. Understand whether the arrears are due to financial hardship, disrepair issues, or other factors. This information can help you determine the best approach.
Try to negotiate a repayment plan with the tenant. This plan should outline how the arrears will be paid back over a specific period while ensuring that current rent continues to be paid. Be flexible, but ensure that the plan is realistic for both parties.
If communication and negotiation do not resolve the issue, you can issue a formal notice, such as a Section 8 Notice, which seeks possession of the property based on rent arrears. It is important to provide the tenant with the required notice to ensure the eviction is legal.
Seek legal advice and consider involving a solicitor experienced in landlord-tenant matters. They can guide you through the legal process, ensure you follow the correct procedures, and represent you in court if necessary.
If the tenant does not clear the arrears or agree to a repayment plan, you may need to start court proceedings. If you obtain a possession order, it gives the tenant a deadline to vacate the property.
Be aware of the legal protections in place to prevent retaliatory eviction. Ensure that the property is in a habitable condition and that you have responded to any disrepair issues raised by the tenant. Failing to address disrepair can impact eviction proceedings.
If the tenant receives Universal Credit, Jobseeker's Allowance, or Employment and Support Allowance, you can request that the arrears be deducted directly from these benefits through the Rent Arrears Recovery (RAR) procedure.
Do not take any actions that may be considered illegal eviction, such as changing the locks or removing the tenant's possessions. Only the court has the authority to grant possession.
Tenants
As a tenant, there are steps you can take to address the issue and potentially avoid eviction.
Our top tips:
Familiarise yourself with your rights as a tenant, including the legal procedures and protections in place to prevent unfair eviction and revenge eviction. The law provides specific steps and notice periods that landlords must follow.
Explore available financial assistance options, such as government support or local charities that offer help with rent arrears. These resources can provide temporary relief.
Discuss a repayment plan with your landlord to pay off the arrears over time. This plan should be realistic and affordable based on your financial situation.
Ensure that you continue to pay your ongoing rent as it becomes due, in addition to making payments toward the arrears. This demonstrates your commitment to fulfilling your tenancy obligations.
If you receive a Section 21 Notice seeking possession, understand that it does not require a specific reason for eviction, which is why it's called a no-fault eviction. However, the Deregulation Act 2015 introduced measures to prevent retaliatory eviction. Ensure your rights are protected.
Can rent arrears be written off?
Rent arrears are typically not written off or forgiven by landlords. Rent arrears represent unpaid rent that is owed by the tenant to the landlord under the terms of the tenancy agreement.
There are some situations in which rent arrears may be reduced or cleared such as:
Negotiated Repayment Plans: Tenants and landlords can negotiate repayment plans to clear rent arrears over an extended period. These plans outline how the tenant will repay the outstanding rent in addition to their current rent payments. This could include increasing the rent.
Dispute Resolution: If there is a dispute regarding the rent arrears, tenants and landlords can use dispute resolution services, such as mediation, to reach an agreement on the amount owed and a repayment plan.
Financial Assistance: Some tenants may be eligible for financial assistance from government support programs or local charities that provide help with rent arrears. These sources can provide temporary relief and reduce the amount owed.
Changes in Tenancy Terms: In certain situations, landlords and tenants may agree to changes in the tenancy terms, including a reduction in the rent arrears owed.
Court Orders: If a landlord successfully obtains a court order for possession due to rent arrears, the court may specify the terms under which the arrears can be repaid, including how much and over what period.
It's important for both tenants and landlords to engage in open communication and follow legal processes to address arrears and prevent unnecessary legal disputes and evictions.
What to do if a tenant leaves without paying rent?
If a tenant leaves a rental property without paying rent, it is essential for landlords to take appropriate steps to address the situation and attempt to recover the unpaid rent.
Secure the property
As the tenant has vacated the property, the first step is to secure the premises. Change the locks to prevent unauthorised access and safeguard the property from potential damage or theft.
Attempt to contact the tenant to ascertain the reason for their departure and any intention to pay the outstanding rent. Written communication, such as emails and letters, can serve as documentation of your efforts to resolve the matter.
Check the deposit
If the tenant paid a security deposit, assess whether any of the unpaid rent can be deducted from the deposit. However, remember that the deposit is primarily for damages and unpaid rent arrears are separate.
Itemised statement
If the deposit does not cover the full amount of unpaid rent, provide the tenant with an itemised statement of the rent owed, any applicable charges or deductions, and a request for payment. This statement can be used as evidence in case further action is required.
Consider using mediation services to facilitate discussions between you and the tenant to reach a resolution. Mediation can help both parties find a mutually acceptable agreement.
If the tenant is unresponsive and the unpaid rent is substantial, you may consider legal action to recover the debt. This could involve taking the tenant to small claims court to obtain a judgement for the unpaid rent.
If the tenant has left without providing contact information, you can use tracing services or skip tracing to locate the tenant and serve them with the necessary legal documents.
It is advisable to consult with legal professionals, such as solicitors or debt recovery specialists, to navigate the legal process and understand your options.
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