Help needed with very small rent arrears

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  • Help needed with very small rent arrears

    I have recently taken on a portfolio of properties consisting of mainly tenants on housing benefit. Generally everything goes well and all payments are received from the council on time.
    The tenants are required to "top-up" their housing benefit where it falls short of the monthly rent on their tenancy agreement, some amounts are as small as £10 a month others up to £100 a month.
    I have a problem with some tenants who will not under any circumstances pay their top ups although the housing benefit is paid. Ive had enough of chasing and writing and phoning and now i would like to service notice on them.
    Am i legally able to do this>? there is no mention of topup payments on their tenancy agreements but as far as im concerned their rent is short every month. Can i service notice? Do i have to wait till the end of the minimum term or does this constitute rent arrears irrespective of how the rent is paid therefore issueing a section 8?

    Your help would be appreciated.

  • #2
    Originally posted by nick4692 View Post
    I have recently taken on a portfolio of properties consisting of mainly tenants on housing benefit. Generally everything goes well and all payments are received from the council on time.
    The tenants are required to "top-up" their housing benefit where it falls short of the monthly rent on their tenancy agreement, some amounts are as small as £10 a month others up to £100 a month.
    I have a problem with some tenants who will not under any circumstances pay their top ups although the housing benefit is paid. Ive had enough of chasing and writing and phoning and now i would like to service notice on them.
    Am i legally able to do this>? there is no mention of topup payments on their tenancy agreements but as far as im concerned their rent is short every month. Can i service notice? Do i have to wait till the end of the minimum term or does this constitute rent arrears irrespective of how the rent is paid therefore issueing a section 8?

    Your help would be appreciated.
    1. What sort of tenancies are they: AST, SAT, or something else?
    2. Does each Agreement state the full rent payable?
    3. The concept of "top-up" is misleading. T has to pay full rent reserved in Agreement, irrespective of whether funding it from own money, HB, rich uncle, or any other source.
    4. If AST or SAT, under Housing Act 1988, serve Notices under s.8- ground 8 or 10 or 11 (or some or all of them), as appropriate.
    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


    • #3
      Chasing Small Rent arrears

      Hi, many thanks for your reply.
      Its a standard AST for either six or twelve months depending on the tenant.
      So i am able to serve section 8 if i want to even if its still within the initial 6/12 month tenancy period.
      These are tenants i "inherited" when i secured the contract so did not reference them myself, but they are taking the mickey in thinking they dont have to pay their topups just becuase they are on housing benefit.

      there is nothing stated in the tenancy agreement about how the rent is funded, just standard clauses that all rent to be paid on time with £50 late payment charge if not received by 8th of the month or £100 if not received by the end of the month.
      Ive had enough chasing and getting excuses so would rather get rid of the tenants and put in our own credible and referenced tenants.
      Nick

      Comment


      • #4
        "there is nothing stated in the tenancy agreement about how the rent is funded, just standard clauses that all rent to be paid on time with £50 late payment charge if not received by 8th of the month or £100 if not received by the end of the month."

        I'm asking the forum out of curiosity and lack of knowledge whether the late payment charges are legal and enforceable?

        Comment


        • #5
          you cant serve notice under Ground 8 as that is for 2 months rent arrears however you can serve under ground 10 and/or 11 as Jeffrey states.

          if the tenants have signed the agreements then clauses are enforceable. Might be worth writing them letter stating that you unless they bring their top-ups up to date then you will start to enforce the charges as stated in the TA.

          Comment


          • #6
            Originally posted by Poppy35 View Post
            you cant serve notice under Ground 8 as that is for 2 months rent arrears however you can serve under ground 10 and/or 11 as Jeffrey states.

            if the tenants have signed the agreements then clauses are enforceable. Might be worth writing them letter stating that you unless they bring their top-ups up to date then you will start to enforce the charges as stated in the TA.
            I agree, except to clarify that "two months arrears" amount does NOT mean non-payment in each of two months (perhaps T pays short every month, so no entire monthly payment is missing)- only that the total arrears equal or exceed the amount of two months' rent.
            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


            • #7
              problem chasing small rent arrears

              Thanks for your replies.
              Varied answers, but just to clarify:
              The tenants in question have their rent paid every month by housing benefit (hb)which make 13 payments a year (as they pay in arrears) therefore hb x 13 divided by 12 = monthly rent as Tenancy Agreement. where hb is less than monthly rent tenant is required to top up the difference. Some tenants only owe £10 a month, others owe £40 or more. It is the small amounts that these tenants do not pay and technically some of these are three months or more in arrears even though hb is paid on time every month.
              My solicitor says (and so do you here) that i have grounds to terminate the tenancy, but im not sure under which sections. Im basically fed up of chasing no hopers who clearly have no intention of paying these top ups so i want them out and need the best way of doing so.
              What section do i serve if the tenants are still within their initial six months? I assume after this period standard section 21 can be served requiring posession of the property?
              Regards
              Nick

              Comment


              • #8
                Originally posted by nick4692 View Post
                Thanks for your replies.
                Varied answers, but just to clarify:
                The tenants in question have their rent paid every month by housing benefit (hb)which make 13 payments a year (as they pay in arrears) therefore hb x 13 divided by 12 = monthly rent as Tenancy Agreement. where hb is less than monthly rent tenant is required to top up the difference. Some tenants only owe £10 a month, others owe £40 or more. It is the small amounts that these tenants do not pay and technically some of these are three months or more in arrears even though hb is paid on time every month.
                My solicitor says (and so do you here) that i have grounds to terminate the tenancy, but im not sure under which sections. Im basically fed up of chasing no hopers who clearly have no intention of paying these top ups so i want them out and need the best way of doing so.
                What section do i serve if the tenants are still within their initial six months? I assume after this period standard section 21 can be served requiring posession of the property?
                Regards
                Nick
                See para. 4 in post #2. Notice is under s.8 of Housing Act 1988. This can operate even during fixed term and, if ground 8 applies, it is much quicker than s.21 Notice which cannot operate until term ends. Even if g8 does not apply (because arrears <2 mths.), still use g10 (any arrears) and g11 (persistent late payment) but remember that these two are discretionary (ie Court may or may not make Order).
                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


                • #9
                  From my personal experience of working with people on HB, you're wasting time and money trying to take action using Section 8 Grounds 10 and 11, unless the arrears has built up to a substantial amount. A judge will probably be irritated by you taking up court time on chasing possession based on such small amounts, regardless of the fact they haven't paid anything. You're better off using Section 21 as there's no discretion.

                  Comment


                  • #10
                    Originally posted by RichieP View Post
                    From my personal experience of working with people on HB, you're wasting time and money trying to take action using Section 8 Grounds 10 and 11, unless the arrears has built up to a substantial amount. A judge will probably be irritated by you taking up court time on chasing possession based on such small amounts, regardless of the fact they haven't paid anything. You're better off using Section 21 as there's no discretion.
                    ...but, if g8 applies, certainly serve section 8 Notice (and section 21 to be on the safe side).

                    Despite RichieP, I'd still lean towards serving under:
                    i. g10 in all cases where rent arrears > one month; and
                    ii. g11 in all cases where persistent late payments in > three months consecutively;
                    with g8 if applicable.

                    Why should L be a free lender to T? Yes, it's a pity that T's Housing Benefit is delayed but shouldn't T be the one who pursues the local authority?
                    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

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