Oral letting to friend- how to serve Notice?

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    Oral letting to friend- how to serve Notice?

    September 05 i let a flat to a colleague, as it was someone i thought i knew well i didn't do a tenancy agreement, silly i know, i've been a landlord for years and should have known better.

    Anyway, rent payments have been few and far between and i decided action needed to be taken. July i issued a section 8 notice for arrears and at the same time sent an example tenancy agreement that i would normally use (i can prove this through my other tenancies). I stalled taking action on the notice as the tenant was claiming significant health difficuties. Rent has continued to be missed.

    On the 2nd September, just over 12 months after she moved in, i served a section 21 notice which expired earlier this month as i've decided to sell the property.

    I have not been to concerned at the lack of tenancy as a) as its post 1997 it is a default AST as their is no other agreement, and b) i have sent numerous letters etc which confirm both the rental amount and the date the tenancy commenced. However, i've been looking over the section 21 accelerated possession claim form today and their is a lot of emphasis on the tenancy agreement.

    Would welcome opinions on shoud i, a) take action on the section 8 notice (no payments have been received since it was served), b) take action through the standard possession route on the section 21 (inorder that the lack of tenancy issue can be questioned and dealt with in court), or c) take it through the accerelared possession route despite the lack of tenancy agreement.

    All input appreciated, as with many things with being a landlord, got to learn by mistakes but this have been an expensive lesson!

    Thanks
    Pete

    #2
    I'm not too familiar with court proceedings for possession as I've never had to go that route, but I would think that a lack of a written AST is not the end of the world but will make it difficult.

    Whether you have served a S.8 Grounds 8,10 & 11 or a S.21 Notice then you will need to submit as much documentation as you can to show that a tenancy existed. It's basically up to you which one you want to use as you appear to know how they both work!

    Anybody else have any contribution?
    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

    Comment


      #3
      My understanding is that while you can use s21, because there is no tenancy agreement it will go to a hearing.

      As a hearing will be involved, the s21 procedure will be just a slow as going down the s8 route. My thoughts are thus to use the s8 route. At least you will get a money judgement as part of the process.

      I did one 4 years ago for just over £2,000, and have long since written it off. Unbeknown to me the former tenant's situation has improved, and the couple went for a mortgage but were rejected unless they can show the debt as satisfied. They paid cash last week, and I did a letter confirming the debt was fully satisfied. Lovely.

      I have a dilemma now though: the debt was written off as a bad debt in 2003, but I now have cash. Do I enter it into the books or have a good tax-free Christmas?
      On some things I am very knowledgeable, on other things I am stupid. Trouble is, sometimes I discover that the former is the latter or vice versa, and I don't know this until later - maybe even much later. Because of the number of posts I have done, I am now a Senior Member. However, read anything I write with the above in mind.

      Comment


        #4
        Originally posted by Esio Trot View Post
        My understanding is that while you can use s21, because there is no tenancy agreement it will go to a hearing.

        As a hearing will be involved, the s21 procedure will be just a slow as going down the s8 route. My thoughts are thus to use the s8 route. At least you will get a money judgement as part of the process.

        I did one 4 years ago for just over £2,000, and have long since written it off. Unbeknown to me the former tenant's situation has improved, and the couple went for a mortgage but were rejected unless they can show the debt as satisfied. They paid cash last week, and I did a letter confirming the debt was fully satisfied. Lovely.

        I have a dilemma now though: the debt was written off as a bad debt in 2003, but I now have cash. Do I enter it into the books or have a good tax-free Christmas?
        Time limits are different. though.
        S.21 is a two month (or more) notice.
        S.8 grounds 3 4 8 10-13 14A 15 and 17 are two weeks only (but the others are two months).
        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


          #5
          You cannot go the accelerated possession route unless you have a written agreement as all paperwork must go to the court for the judge to look at in chambers.

          I'd go the S21 route and use court form N5. You can always do a separate money claim on line.

          If you go the S8 route she might come up with enough money to keep her at 7 weeks in arrears and stay in the property.

          Comment


            #6
            Interesting story, Esiotrot- maybe I will do a moneyclaim on that £1500 I'd written off after all!

            Comment


              #7
              Originally posted by Esio Trot View Post
              My understanding is that while you can use s21, because there is no tenancy agreement it will go to a hearing.

              As a hearing will be involved, the s21 procedure will be just a slow as going down the s8 route. My thoughts are thus to use the s8 route. At least you will get a money judgement as part of the process.

              I did one 4 years ago for just over £2,000, and have long since written it off. Unbeknown to me the former tenant's situation has improved, and the couple went for a mortgage but were rejected unless they can show the debt as satisfied. They paid cash last week, and I did a letter confirming the debt was fully satisfied. Lovely.

              I have a dilemma now though: the debt was written off as a bad debt in 2003, but I now have cash. Do I enter it into the books or have a good tax-free Christmas?
              Ask your accountant, and get his/her advice in writing- or your next Xmas might be at Her Majesty's Pleasure.
              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


                #8
                Originally posted by attilathelandlord View Post
                You cannot go the accelerated possession route unless you have a written agreement as all paperwork must go to the court for the judge to look at in chambers.

                I'd go the S21 route and use court form N5. You can always do a separate money claim on line.

                If you go the S8 route she might come up with enough money to keep her at 7 weeks in arrears and stay in the property.
                Umm, not so sure of this, attila. Documentation on this particular tenancy can include examples of the OP's other tenancies, letters between landlord and tenant, bank statements showing what rent WAS received, all showing that there was a default AST. Just because it's not neatly collected into a single document doesn't mean to say the AST isn't documented, and certainly doesn't mean the AST doesn't exist (OP is correct on that point).

                Comment


                  #9
                  Very true, but the form N5B does ask you to attach a copy of the AST for the judge's edification and delight.

                  Also, since there is no hearing, the judge is merely looking over the paperwork. He/She is not going to sit there and wade through loads of paper. They will look for the AST and if it's not there, then fuggedaboudit!

                  I wouldn't take the chance, the accelerated route is a misnomer, it can take just as long as the normal route. All it means is the judge looks at the paperwork in chambers, there isn't a hearing (therefore no opportunity for landlord to try and prove AST).

                  As for accounting for recovered bad debts, well if they were true bad debts (ie no hope of recovery) they should have been written off against profit in the tax year in which they occurred (along with any costs involved in chasing the debt ie court costs), thereby reducing taxable profit.

                  If you get lucky and receive the money in subsequent years then the debt is effectively "written back" onto your books, increasing income and you treat it and any interest and costs received, as taxable income and it is treated and taxed as such.

                  Look at the Property Income Manual on the Inland Revenue website, it goes into all of this.

                  Comment


                    #10
                    Thanks for the advice everyone, someone has recently told me that if i go the s21 possession route and the judge doesn't think the paperwork is to his satisfaction it would automatically have a hearing anyway, anyone had any expereince of this?

                    Pete

                    Comment


                      #11
                      In the end have gone for acting on the section 21 but applied to court on an N5 rather than the 'fast' route to ensure a hearing. as advised, have also done a seperate claim online for a money judgment, was suprised how quick and easy this was to do and will definately do again if needed.

                      Thanks
                      Pete

                      Comment


                        #12
                        If you have a hearing you don't need to issue seperate small claims proceedings. You ask for a money judgment to be entered, once the judge awards possession. Then you can pursue it further if necessary, eg Attachment of Earnings.

                        Comment

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