Using Debt Collection Agency for unpaid rent

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    #46
    Originally posted by Lawcruncher View Post
    It follows from all this that a clued up tenant faced with a demand from a DCA will enquire as to the basis on which the DCA get their fee. If he discovers that it is on a "no win, no fee" basis, he will not pay, because simply by paying he will owe more.
    I'm not with you - what difference does it make how the DCA gets their fee, if it's going to be charged back to the tenant anyway? ie, what's the point in asking?

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      #47
      Good advice,PI Guy and Rodent.

      Comment


        #48
        Originally posted by Findermonkey View Post
        Have you considered using a trace company to trace any debtor and then getting a solicitor to send out a letter before action? Usually works, if you know the address of the debtor, obviously bypass the trace company and go straight to the letter before action.

        A letter from a solicitor is going to be more effective than a letter from a DCA, in my opinion.

        In your opinion OR in your experience ?
        The threat of a solicitors letter -v- threat of DC involvement.
        Which one to have greatest effect?

        I know what my educated(thru experience!) opinion is


        The Rodent
        A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
        W.Churchill

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          #49
          Originally posted by Ericthelobster View Post
          I'm not with you - what difference does it make how the DCA gets their fee, if it's going to be charged back to the tenant anyway? ie, what's the point in asking?
          In a situation where the tenant is liable to pay the fees of a DCA and where:

          1. The DCA's fee is payable if and only if rent is recovered by the DCA

          and

          2. No rent is recovered

          Then,

          No fee is payable.

          If no fee is payable there is nothing in the way of fees to recover from the tenant.

          Paying the rent to the DCA makes the fee payable and recoverable from the tenant.

          Why should a sensible tenant pay the DCA and incur expense, when by not paying no expense is incurred?

          Comment


            #50
            Originally posted by Lawcruncher View Post
            In a situation where the tenant is liable to pay the fees of a DCA and where:

            1. The DCA's fee is payable if and only if rent is recovered by the DCA

            and

            2. No rent is recovered

            Then,

            No fee is payable.

            If no fee is payable there is nothing in the way of fees to recover from the tenant.

            Paying the rent to the DCA makes the fee payable and recoverable from the tenant.

            Why should a sensible tenant pay the DCA and incur expense, when by not paying no expense is incurred?
            Not paying in a timely manner will incur a "larger collection fee" by drumming up DC time effoerts and overheads as expenses i guess (on top of the fee maybe?) and more interest accumulating on a daily basis, to bury head in sand and use logic of "just dont pay it it will be cheaper" clearly wont help sit as the final outcome will be court and all the fees and costs associated with this on top when T loses.

            If a T asked me to clarify the sit i would just say "I have no idea how they are able to this, but once they have the case, i'm sure they will be very happy to explain it to you !"

            I do not profess to understand the legalities of this as this is DC charging system, would be interested to clear this point up tho !
            Once Debt is passed to DC, 15% is chargeable by DC, it is then up to DC just how far and long he decides to pursue the case..(apparently?)

            I really only get to "illustration stage" ie breakdown of what the cost will be "next" week,should i pass case over to DC (inc late payment fees, admin fees, interest on bal and 15% Dc fee) then as a shining Knight show them the one and only way to avoid this sit and have all MY fees removed as well, is just pay the basic O/S rent fig ....simple carrot and stick psychology really nothing too clever!
            A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
            W.Churchill

            Comment


              #51
              Originally posted by Lawcruncher View Post
              In a situation where the tenant is liable to pay the fees of a DCA and where [...]
              Why should a sensible tenant pay the DCA and incur expense, when by not paying no expense is incurred?
              Sure, I follow that - but what I'm getting at is how else would a DCA receive their fee, other than as 'no win no fee' so as to render the tenant not liable to pay it?

              Comment


                #52
                Originally posted by sparkie View Post
                Hi Rodent, this is very savvy. Do you have this in writing that you could you share?
                Further reading on "Well Oiled Machine" Here :

                http://www.landlordzone.co.uk/forums...debt+collector

                Post 25 then 24 ! in particular

                A search for debt collector using rodent1 as user will find you most of what you have asked for from me !!!

                When you have read that lot i wont need to write the book

                The Rodent
                A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
                W.Churchill

                Comment


                  #53
                  Much will depend on the wording within the tenancy agreement, and I agree broadly with Lawcruncher's comments.

                  Essentially when the DC says to T how much is owed he is adding on his costs. IF DC is operating under a no pay no fee basis then the letter from DC is correct that IF T pays now then the fees of DC would be recoverable.

                  What if T does not pay?

                  If T does not pay and DC writes again saying that the outstanding amount has increased this again is correct, but ONLY if T pays. The nature of the agreement DC has with L is that DC's fees are only payable on a successful recovery. This means that if T does not pay then should L or DC bring a court claim for the rent plus DC's costs the element that relates to DC's costs would not be recoverable as DC's actions were not successful.

                  So Lawcruncher is saying that if the T was aware of the manner in which DC gets paid there is no incentive for T to pay as he has to pay more. This leaves the L with only the option of legal action and as soon as the claim is issued T could pay (and L could not recover DC's fees).

                  This really is a moot point to some degree as if the DC fails to recover money then L is not liable for DC's costs (so L does not lose out)

                  The problem for T is that he does not know how DC gets paid - DC is unlikely to disclose the funding arrangement.

                  If DC's manage to get payment then great - but if they dont then L has to consider court action - the time of involving DC would delay that claim.

                  Each option of enforcement has pro's and con's. Solicitors threatening legal proceedings and the resulting CCJ will only influence a T if they have a reasonably good credit history.
                  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


                    #54
                    Some interesting legal arguments.

                    Question: if DC is instructed to collect debt and T pays (or attempts to pay) LL direct afterwards, where does this leave DC?
                    Is LL not allowed to accept?

                    If LL is not allowed to accept payment of the debt by terms of DC contract, then by LL not accepting rent from tenant, surely a court would recognise that it's the LL's action that has kept tenant 'in arrears' so a section 8 claim for possession/money judgement would fail?
                    All posts in good faith, but do not rely on them

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                      #55
                      Originally posted by Bel View Post
                      Some interesting legal arguments.

                      Question: if DC is instructed to collect debt and T pays (or attempts to pay) LL direct afterwards, where does this leave DC?
                      Is LL not allowed to accept?

                      If LL is not allowed to accept payment of the debt by terms of DC contract, then by LL not accepting rent from tenant, surely a court would recognise that it's the LL's action that has kept tenant 'in arrears' so a section 8 claim for possession/money judgement would fail?
                      L must be allowed to accept T's rent! A deal between L and DCA does not bind T, and- after all- the rent ultimately belongs to L.
                      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                      4. *- Contact info: click on my name (blue-highlight link).

                      Comment


                        #56
                        Originally posted by Bel View Post
                        if DC is instructed to collect debt and T pays (or attempts to pay) LL direct afterwards, where does this leave DC?
                        Wouldn't this be analagous to instructing the sale of a house through an estate agent, and then trying to avoid paying the commission by negotiating a sale directly with a buyer (which the agent's T&Cs would almost certainly prevent)?

                        ie, if L has warned T that a DC will be instructed (at T's cost) if T doesn't cough up by a certain date; then T cannot circumvent any DC fees by paying the LL direct after the cut-off date (provided it's all covered by the LL-T and DC-LL T&Cs of course)?

                        Comment


                          #57
                          Originally posted by Ericthelobster View Post
                          Wouldn't this be analagous to instructing the sale of a house through an estate agent, and then trying to avoid paying the commission by negotiating a sale directly with a buyer (which the agent's T&Cs would almost certainly prevent)?

                          ie, if L has warned T that a DC will be instructed (at T's cost) if T doesn't cough up by a certain date; then T cannot circumvent any DC fees by paying the LL direct after the cut-off date (provided it's all covered by the LL-T and DC-LL T&Cs of course)?
                          Further to my post 35

                          It would be my feeling that the AST would have to specifically allow for this (if T doesn't cough up by a certain date; then T cannot circumvent any DC fees by paying the LL direct after the cut-off date ) to happen to even stand a chance.

                          But even so, can the TA bind the tenant to that extent. Can the right of the T to be able to pay the LL rent direct, be contracted out of? In the same way that a LL cannot contract out of certain safety checks and repairs? Would the clause be void?
                          All posts in good faith, but do not rely on them

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                            #58
                            Debt Collection Agency

                            I have obtained a court order for former tenant arrears. Can anyone recommend a good debt collection agency?
                            Thanks

                            Comment


                              #59
                              http://www.thornburycollections.co.uk/
                              Best Regards

                              PI Guy

                              Comment


                                #60
                                Chasing money owed - Is it worth it?

                                hi people

                                have a T who basically done a runner or technically gave up the tenancy by leaving. Anyway they left owing £610 in rent, the £550 bond was supposed to pay that to which i agreed assuming there was no damage. However on inspection of the property there was damage done, basically to the tune of £500. therefore after deductiong the deposit (should my claim for that go smoothly) the T would still owe me £560, I have tried tirelessly to contact T but they have simply ran off with forwarding address and basically have no intention of paying any money, they simply refuse to return my calls.

                                My main point is... is it worth chasing this debt of £560 throught the courts? My thought is no, which goes against the grain because why should they get away with it, I'm sure many have been in this spot before, but does it make financial sense to chase it? Could i do it all myself without involving solicitors? Though i wouldnt know where to start, plus they have not paid a penny in council tax so I doubt that i'd get it back anyway as I'm not the only one after them.

                                Even if I choose not to chase them officially I do intend to try and track them down and chase them personally, but I just dont know if its worth going down the official route.

                                Thanks

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