If you find yourself in a situation where your tenants are unable to pay their rent, it can understandably be a very stressful time. Landlords need security as well as tenants, and rent arrears can put landlords in a difficult situation financially.
It’s never going to be a pleasant conversation to have, but knowing the process of how to recover rent arrears from a tenant and how to evict a tenant for rent arrears can make it that bit easier. Be mindful that from a lawful perspective, a tenant is not in rent arrears until they are two months behind in their rent
Important to note: The Renters Reform white paper is due to be read in Parliament in May 2023, which will change the way tenants can be evicted and the grounds to which they can be given notice on a property. It is understood that changes will be made to the paper before it becomes an act of parliament through the coming months. Information is subject to change.
How to claim rent arrears from tenant
By being clued up on the processes involved in claiming rent arrears from a tenant, landlords can recover the funds both more easily and quickly.
1. Take the time to speak to your tenant
Life happens and emergencies can drain savings in an instant. By speaking to your tenant after the missed rent payment, you can find out whether the missed payment is a result of a short-term emergency, or long-term financial strain. Whether you send a letter, email or text message, ensure you remain polite and civil – aggression and threats aren’t going to help the situation.
If the tenant has fallen into rent arrears as a result of a short-term financial problem, some landlords consider offering a repayment plan. For example, the missed payment could be split across the next three months and added to the normal rent payment. This could help both keep an amicable relationship between tenant and landlord, and avoid the longer process of going to court.
2. Contact your insurers
If you have landlord insurance, it is a good idea to make them aware of the situation. Some landlord insurance policies cover missed rent payments, so taking the time to speak to your insurer is essential. They will be able to inform you if your policy covers missed rent and tenant rent arrears, and if so, how much it covers as well as the claims process.
3. Follow up and contact guarantors
If after your first attempt to contact your tenant fails and they still have outstanding rent arrears 14 days after it was due, it’s time to follow up. Send them another letter, email or text message stating that they need to settle their arrears, or you will be taking the matter further.
Some tenancy agreements include guarantors – a person, usually a family member, who agrees to pay a tenant’s rent if they default on payments. If your tenant has a guarantor listed, you should contact them to let them know that the tenant in question is in arrears – thus breaching the terms of the contract.
4. Claim possession of your property
When the tenant reaches 21 days in rent arrears, send a third letter explaining your intention to take legal action should the rent not be paid. When the next rent payment is due, if the tenant still hasn’t paid, they can be considered to be in eight weeks worth of rent arrears.
At this point, if the tenant has not paid and has not tried to resolve the situation, landlords can take action to claim possession of their property under the Housing Act of 1988. This can be achieved through serving a Section 8 or Section 21 notice.
5. Serve an eviction notice
Tenants in rent arrears can be evicted using either a Section 8 notice, a Section 21 notice, or both. The type of notice you’ll need to serve depends on your individual circumstances, so seeking legal advice is always best.
Section 8 notices can be used if tenants have broken the terms of the tenancy – this includes failure to pay rent and being in rent arrears. Find out how to serve a Section 8 notice for seeking possession.
A Section 21 notice can be served after a fixed term tenancy ends if there’s a written contract or during a tenancy with no fixed end date – known as a ‘periodic’ tenancy. Section 21 notices cannot be served unless a certain criteria is met. Some instances where a Section 21 notice can not be served include, but aren’t limited to:
- It’s less than four months since the tenancy started, or the fixed term has not ended, unless there’s a specific clause in the contract which allows you to do this.
- The property is a house in multiple occupation (HMO) but does not have a HMO licence from the council.
- You did not provide your tenant with a copy of the property’s Energy Performance Certificate, government’s ‘How to rent’ guide and a current gas safety certificate for the property before the tenant moved into the property.
Evicting a tenant for rent arrears
Most landlords with tenants in rent arrears tend to want to evict them as soon as possible in order to secure a tenant who can pay their rent in full and on time.
A landlord can ‘seek possession’ and evict a tenant in rent arrears, but they must follow a specific procedure. They will need to provide the tenant with a written notice, and will likely have to seek a court order (a ‘possession order’). If the tenant refuses to leave the property by the date stated on the possession order, the landlord will need to seek a ‘warrant of eviction’ to enable bailiffs to evict the tenant.
It’s essential for a landlord to follow the correct processes when evicting a tenant in rent arrears, so we always recommend seeking legal advice.
Can a deposit be used for rent arrears?
Yes, it is possible for a deposit to be used for rent arrears. However, a landlord can’t simply withdraw the funds from the deposit as they please. Applying for possession of the property and serving an eviction notice will mean that the landlord should be able to recover some (if not all) of the outstanding rent through the deposit.
Remember, in England and Wales, deposits are required by law to be held in a government-approved Tenancy Deposit Scheme (TDP) if you rent your property on an assured shorthold tenancy that started after 6 April 2007.
To make your life easier, consider using landlord services to ensure that you are supported throughout the tenancy.