Tenants not paying rent creates stress and has serious financial implications for landlords of residential properties. Hayley Wharton sets out the legal picture and explains the solutions.
If your tenant doesn’t pay their rent, it’s worth keeping in mind that there is a difference between ‘can’t pay’ and ‘won’t pay’.
So a good starting point is to talk to your tenant to find out why they haven’t paid. The problem might only be a temporary issue, or a one-off lapse. It might even be a banking glitch.
Remember to always keep your communication professional. If you behave in a polite and reasonable manner from the start, this will put you in good stead if you have to take matters further.
The importance of establishing a firm footing for action
If the tenant has not paid rent on time you should write to them requesting payment within seven days. If there has been no payment after 14 days, write to the tenant’s guarantor (if there is one) informing them of the situation.
Finally, if the rent remains unpaid after 21 days, write to the tenant again, confirming that you intend to take legal action. Also, it’s crucial to keep records of all written communication.
Using the law to reclaim your property and the rent owed
If the tenant pays monthly and is two months in arrears, the landlord is entitled to claim possession of the property under the Housing Act 1988. This involves serving a section 8 notice on the tenant and guarantor (again, if there is one).
The notice informs the tenant of the rent arrears by including a rent schedule and confirms that if payment is not made in 14 days, you will take the tenant to court to obtain a possession order, along with a judgment for the rent arrears. It is important to note that the section 8 notice must be served to the tenant in a legally prescribed form.
An issue for landlords using section 8 is that if the tenant pays some of the arrears on or before the day of the court hearing, this may mean that there is no longer at least eight weeks’ rent outstanding. In cases like this the threshold for obtaining possession may not be satisfied.
However, if the court rules that your application is justified, it will grant a possession order allowing you to get your property back – and the rent arrears.
An alternative legal option for expired tenancy agreements
The alternative to the section 8 route is to use a section 21 notice, which does not require any fault on the part of the tenant but comes with a notice period of two months. As with section 8, the section 21 notice must be in a prescribed form.
Section 21 only applies where the formal tenancy period is at an end, which means landlords don’t have to give a reason for reclaiming the property. As a result, the judge is more likely to find in the landlord’s favour.
For further advice on tenants not paying rent, call Hayley Wharton on 0161 761 8062, or email her at email@example.com