Charges unfair?

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    Charges unfair?

    Over the last year I have been plagued with late rent payment and there seems to be no incetive for the tenants to pay on time.

    Are there any terms I can add to the AST for future tenants to encourage timely payment? I read that doing this may be deemed unfair under "The Unfair Terms in Consumer Contracts Regulations 1999".

    Charging interest on late rent only adds up to a few pence and really isn't worth the hours spent calculating it.

    I'd like to add a schedule of charges for issuing of letters e.g. Tenant agrees to pay: Rent overdue more than 7 days £20 charge for letter. Rent overdue > 14 days = £20 again.
    > 28 days late tenant agrees to pay professional fees of debt collectors/legal costs.
    Cancelled stading order notification letter £20. Bounced cheque notification letter £20.

    As the cost of the paper + envelope + stamp is < £20 would the deposit protection service uphold these charges? What about my time? I do everything manually and when there is a default, I really do have to spend at least 1 - 2 hours checking my bank statements, phoning the tenants, typing a letter, going to a printing shop, taking it to the post office, etc. Is it unreasonable for me to include my time within the administration cost of issuing a letter? What if I were to pay a secretarial service company to go through my bank statements and type and send a reminder letter and pass on the cost?

    Would it be better to provide some wording to the effect that late rent equates to a loan and that the tenant agrees to pay a flat rate fee for the benefit of the loan? (I expect i'd need a credit license?)

    I don't want to make extra money, I just want to relax and be paid on time. What to do?

    #2
    I am afraid you cannot charge any more than interest which is negligable nor can you make up charge for other things like cancellation.

    All you can do is remind them of the section 8 process and grounds for termination

    The rest in totally un-enforceable

    Comment


      #3
      Letting is a business like any other. All businesses have to make allowance for chasing bad payers.

      Comment


        #4
        So basically, the only legally enforceable course of action to encourage rent payment after sending 2 free of charge reminder letters is to make a claim in the county court to recover the arrears?

        It seems like an awful lot of trouble to go to only because no other deterrent to default is available.

        In my opinion, removing from the landlord any ability to get his rent paid without resorting to the courts must surely lead to a massive waste of court time. Also, suing your tenants just because they are too disorganised to pay you on time seems too harsh and adversarial for my liking and is bound to damage the landlord/tenant relationship.

        Why is it that banks are allowed to charge for bounced cheques and unauthorised overdraft fees?

        Comment


          #5
          Originally posted by bureaucrazy View Post
          In my opinion, removing from the landlord any ability to get his rent paid without resorting to the courts must surely lead to a massive waste of court time.
          I don't know if it would be legal, but you could offer a weeks free rent every Xmas providing all that years rent was paid on time
          Originally posted by bureaucrazy View Post
          Also, suing your tenants just because they are too disorganised to pay you on time seems too harsh and adversarial for my liking and is bound to damage the landlord/tenant relationship
          No, not paying rent on time is what damages that relationship.
          Originally posted by bureaucrazy View Post
          Why is it that banks are allowed to charge for bounced cheques and unauthorised overdraft fees?
          Supposedly because the charges reflect the true cost of performing the admin required. IE they are a fee for the service, not a deterent/penalty.

          Whether you believe this is open to debate....

          Comment


            #6
            But how are landlords different from other creditors?

            Comment


              #7
              IMO there is nothing to stop you putting clauses in the contract which detail charges for late payment reminders etc. Whether they are legally enforceable or not is neither here nor there, the tenant may not know this and it may just be enough to encourage prompt payment.

              Comment


                #8
                Well, I use the following clauses as advocated by the RLA:

                You must do the following:
                [...]
                2. Pay our reasonable costs for sending reminder letters. These will be £XX for each reminder.
                3. Pay our reasonable costs for any cheque that does not clear. These will be £XX each time a cheque does not clear.
                ... and personally, I choose to use a value of £15 for £XX.

                People have argued the toss with me here in the past about the validity of this; all can say is that in the 3 cases over the years where I've ended up in court chasing arrears from tenants, I have included these charges and they've been upheld by the judge.

                I only enforce the clause very sporadically; certainly never for a 'first offence'; in the event if problems I chase by phone/text/email and will warn them about formal, chargable letters, which usually does the trick.

                I also don't use them as a way of generating money - eg where I've had a tenant who's simply stopped paying rent full stop, and is waiting for the possession order to arrive, I didn't keep sending weekly £15 reminders for weeks on end (I think he had to pay for 2 or 3 of them in the eventual judgement).

                Comment


                  #9
                  You might want to also put a clause in your tenancy agreement requiring T to pay any legal costs or other expenses incurred as a result of T's breach of the agreement.

                  This would mean you could recover legal costs even in the small claims track. The threat of substantial legal costs may cause T to pay up.
                  PAUL GIBBS, solicitor, Jacobs & Reeves. My comments on this forum are correct to the best of my knowledge and belief. No responsibility or liability is accepted by reason of reliance upon such comments. This disclaimer would not apply to direct clients of Jacobs & Reeves where there is a valid retainer in place and I would be happy to confirm any advice if formally instructed. . Jacobs & Reeves now offer a fixed fee possession service.

                  Comment


                    #10
                    Originally posted by Ericthelobster View Post
                    Well, I use the following clauses as advocated by the RLA:



                    ... and personally, I choose to use a value of £15 for £XX.

                    People have argued the toss with me here in the past about the validity of this; all can say is that in the 3 cases over the years where I've ended up in court chasing arrears from tenants, I have included these charges and they've been upheld by the judge.

                    I only enforce the clause very sporadically; certainly never for a 'first offence'; in the event if problems I chase by phone/text/email and will warn them about formal, chargable letters, which usually does the trick.

                    I also don't use them as a way of generating money - eg where I've had a tenant who's simply stopped paying rent full stop, and is waiting for the possession order to arrive, I didn't keep sending weekly £15 reminders for weeks on end (I think he had to pay for 2 or 3 of them in the eventual judgement).

                    We have the same thing in the tenancy agreements we issue. It is on the 1st page of the agreement in a font larger than the rest of the text.
                    I always explain that it is not something I will do without warning.

                    If I chase rent, I will always phone(they usually do not answer once they know there rent is late) first, then text, and then send a formal letter before sending a "chargeable" letter.

                    In the "chargeable" letter, I always confirm the dates I have previously tried to contact them before issuing it.

                    I am yet to go to court and see if they are upheld, but I have nothing to lose if they are deemed unenforceable.
                    Allow tenants to protect their own deposits. I want free money when they do it wrong

                    Comment

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