Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • hoyalove
    • By hoyalove 12th Jul 17, 10:16 AM
    • 8Posts
    • 0Thanks
    hoyalove
    Rent to tenants with CCJ
    • #1
    • 12th Jul 17, 10:16 AM
    Rent to tenants with CCJ 12th Jul 17 at 10:16 AM
    Hello,

    I have no idea what to do in the situation I am facing now, and would like to seek for advice.

    The tenants have been living in our property for a year and the contract is due to end this month. Last year, tenants paid a year rent upfront after selling their own house so there was no issue with paying the rent at all, and the house has been kept very clean despite of having three kids. But this year they want to pay the rent on a monthly basis, so we have gone through referencing company to check if they can afford and to go ahead with insurance company. Then we found out that tenants have around 1100 of unresolved CCJ from March this year and their incomes are not enough to pay the rent. *We found them through a local agency and did referencing - they did not have any issue earlier. Only we did not add up rent guarantee insurance as they paid upfront.

    He has been working as a black cab driver, and recently found a new job to work at night. It seems like his income as a black cab driver cannot be proved well enough, and other income is also not enough to cover the rent (referencing company said income should be 2.5 higher than the rent to pass - and he did not write any income as a black cab driver). The tenants want to live in the property and we were happy with them, only till the time we found their income and CCJ record. We directly spoke to them about it and tenants said they were not aware of CCJ as their credit score shows 'FAIR' rating? They said they would bring a guarantor instead. Now we do not know if it is OK to accept them for a new contract or if we are taking a high risk.


    Last edited by hoyalove; 12-07-2017 at 10:37 AM. Reason: add
Page 1
    • Rosemary7391
    • By Rosemary7391 12th Jul 17, 10:23 AM
    • 1,841 Posts
    • 3,184 Thanks
    Rosemary7391
    • #2
    • 12th Jul 17, 10:23 AM
    • #2
    • 12th Jul 17, 10:23 AM
    You already rent to them - horse, stable door, bolted? Given that, I'd at least see if they pay up, and if they don't then be very rapid in dealing with it to minimise the amount they owe you.
    Me escondo detras de mi lengua... tengo miedo de que me entiendas... pero me gustara que me entendases ¡Ayudame!
    • Guest101
    • By Guest101 12th Jul 17, 10:26 AM
    • 14,625 Posts
    • 14,349 Thanks
    Guest101
    • #3
    • 12th Jul 17, 10:26 AM
    • #3
    • 12th Jul 17, 10:26 AM
    Hello,

    I have no idea what to do in the situation I am facing now, and would like to seek for advices.

    The tenants have been living in our property for a year and the contract is due to end this month. Last year, tenants paid a year rent upfront after selling their own house so there was no issue with paying the rent at all, and the house has been kept very clean despite of having three kids. But this year they want to pay the rent on a monthly basis, so we have gone through referencing company to check if they can afford and to go ahead with insurance company. - you didn't reference them beforehand?! Then we found out that tenants have around 1100 of unresolved CCJ from March this year and their incomes are not enough to pay the rent. - That's unfortunate for you both

    He has been working as a black cab driver, and recently found a new job to work at night. It seems like his income as a black cab driver cannot be proved well enough, and other income is also not enough to cover the rent (referencing company said income should be 2.5 higher than the rent to pass - and he did not write any income as a black cab driver). - it doesn't matter what they say. They aren't the ones providing a house. The tenants want to live in the property and we were happy with them, only till the time we found their income and CCJ record. We directly spoke to them about it and tenants said they were not aware of CCJ as their credit score shows 'FAIR' rating? - well then they need to deal with it, but unknown CCJs are VERY common They said they would bring a guarantor instead. Now we do not know if it is OK to accept them or if we are taking a high risk.


    Originally posted by hoyalove
    What do you mean accept them. You have no choice. They just live there noiw
    • FBaby
    • By FBaby 12th Jul 17, 10:55 AM
    • 15,709 Posts
    • 39,318 Thanks
    FBaby
    • #4
    • 12th Jul 17, 10:55 AM
    • #4
    • 12th Jul 17, 10:55 AM
    There's no right or wrong answer it all depends on the risk you are prepared to take whether it is worth paying for looking for new tenants and whether you are likely to get more financially secured tenants.

    You then have to consider that if you give them notice they could stop paying all together and wait to be evicted by the courts. If you don't want them as tenants neither will other landlords.

    What I certainly wouldn't do is renew a fixed contract as although you could use a S8 if they don't pay rent it would be much easier to use an S21 with two months notice.
    • Pixie5740
    • By Pixie5740 12th Jul 17, 11:06 AM
    • 10,766 Posts
    • 14,871 Thanks
    Pixie5740
    • #5
    • 12th Jul 17, 11:06 AM
    • #5
    • 12th Jul 17, 11:06 AM
    The fixed term contract comes to an end 31st July? How does the current tenancy agreement say the rent should be paid? Weekly? Monthly? Annually?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • DumbMuscle
    • By DumbMuscle 12th Jul 17, 11:13 AM
    • 196 Posts
    • 290 Thanks
    DumbMuscle
    • #6
    • 12th Jul 17, 11:13 AM
    • #6
    • 12th Jul 17, 11:13 AM
    If they are willing to provide a guarantor, and the checks on the guarantor come back OK, then you at least have some safety net. I would agree with the others here that either going for a rolling tenancy or a fixed term tenancy with a break clause will make it easier to deal with if they don't pay rent.
    • hoyalove
    • By hoyalove 12th Jul 17, 11:17 AM
    • 8 Posts
    • 0 Thanks
    hoyalove
    • #7
    • 12th Jul 17, 11:17 AM
    • #7
    • 12th Jul 17, 11:17 AM
    The term ends on the 24th of July. The contract says that the rent is payable in monthly instalments but tenants will pay the sum for 12 mths to cover a year.
    • Guest101
    • By Guest101 12th Jul 17, 11:18 AM
    • 14,625 Posts
    • 14,349 Thanks
    Guest101
    • #8
    • 12th Jul 17, 11:18 AM
    • #8
    • 12th Jul 17, 11:18 AM
    The term ends on the 24th of July. The contract says that the rent is payable in monthly instalments but tenants will pay the sum for 12 mths to cover a year.
    Originally posted by hoyalove
    and then it becomes monthly tenancy.


    You cannot prevent this
    • G_M
    • By G_M 12th Jul 17, 11:19 AM
    • 40,543 Posts
    • 46,375 Thanks
    G_M
    • #9
    • 12th Jul 17, 11:19 AM
    • #9
    • 12th Jul 17, 11:19 AM
    PROs

    You know them.
    They've been good tenants.
    You trust them (I assume).
    They have income sources above those the referencing company have taken into account
    Evicting them will give you a void
    Evicting them will involve tenant-find costs
    Evicting them will involve other tenant-change costs

    CONS
    Your rent guarantee insurance may (will?) be invalid
    If they struggle and fall into arrears, you'll have hassle. And costs.

    I'd go periodic. Either CPT or SPT. That way you have 2 options for eviction if you later decide to - either S8 and/or S21.

    How much deposit do you hold?
    Is a guarantor a possibility?
    • hoyalove
    • By hoyalove 12th Jul 17, 11:29 AM
    • 8 Posts
    • 0 Thanks
    hoyalove
    Thanks for the comment. I hold 6 weeks of deposit. And the tenants said they would find a guarantor. If guarantor passes referencing it would be easier I guess.
    The contract says: Should the contract have become a periodic, after the fixed term, one month's notice given... etc. So we do not need to make a new contract?
    • Guest101
    • By Guest101 12th Jul 17, 11:32 AM
    • 14,625 Posts
    • 14,349 Thanks
    Guest101
    Thanks for the comment. I hold 6 weeks of deposit. And the tenants said they would find a guarantor. If guarantor passes referencing it would be easier I guess.
    The contract says: Should the contract have become a periodic, after the fixed term, one month's notice given... etc. So we do not need to make a new contract?
    Originally posted by hoyalove
    Its two months notice. and that is notice of intention to go to court. to evict takes on average 4-6 months
    • G_M
    • By G_M 12th Jul 17, 11:33 AM
    • 40,543 Posts
    • 46,375 Thanks
    G_M
    No need to have a new contract then,

    The tenancy becomes a Contractual Periodic Tenancy.

    But: exact wording? is that 1 calender month? 1 tenancy period? A bit ambiguous.

    Plus of course, that only applies to the tenant. The LL still has to serve a (two month) S21 Notice by law.
    • hoyalove
    • By hoyalove 12th Jul 17, 11:37 AM
    • 8 Posts
    • 0 Thanks
    hoyalove
    The contract clearly shows 1 month though. I understood if it is a periodic tenancy it is a month notice by law?
    • rtho782
    • By rtho782 12th Jul 17, 11:39 AM
    • 969 Posts
    • 664 Thanks
    rtho782
    Thanks for the comment. I hold 6 weeks of deposit. And the tenants said they would find a guarantor. If guarantor passes referencing it would be easier I guess.
    The contract says: Should the contract have become a periodic, after the fixed term, one month's notice given... etc. So we do not need to make a new contract?
    Originally posted by hoyalove
    You don't need to do anything. In fact, you can't do anything.

    Two possible outcomes:

    1. They vacate at the end of the term. They don't have to give you any notice.

    2. They are there the day after the end of the term, the tenancy is now periodic, and they have to give you 1 rental period notice if they want to leave. You have to give them 2 months notice, but that doesn't end the tenancy, instead means you can then take them to court if they don't leave.

    You can't boot them out at the end of the term, as you would have had to serve 2 months notice, and it's too late for that now.

    So forget the CCJ, you have tenants.
    Deposit Saved since 01/12/15: £13,000 / £15,000 House Bought!

    Debt Cleared since 01/12/15: £6,000 / £7,500
    • Guest101
    • By Guest101 12th Jul 17, 11:41 AM
    • 14,625 Posts
    • 14,349 Thanks
    Guest101
    The contract clearly shows 1 month though. I understood if it is a periodic tenancy it is a month notice by law?
    Originally posted by hoyalove
    two months, you must give two months notice (by law)
    • Pixie5740
    • By Pixie5740 12th Jul 17, 11:45 AM
    • 10,766 Posts
    • 14,871 Thanks
    Pixie5740
    The contract clearly shows 1 month though. I understood if it is a periodic tenancy it is a month notice by law?
    Originally posted by hoyalove
    You can put what you like in a contract (tenancy agreement) but that doesn't mean it overrules tenant's statutory rights. It would be useful if you could quote the exact wording in the tenancy agreement relating to notice and the frequency of rent payments.

    See G_M's guide to Ending/renewing an AST as you seem to be a little unclear about what happens at the end of a fixed term and how/when a tenancy can be ended.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • FBaby
    • By FBaby 12th Jul 17, 4:13 PM
    • 15,709 Posts
    • 39,318 Thanks
    FBaby
    Then we found out that tenants have around 1100 of unresolved CCJ from March this year and their incomes are not enough to pay the rent.
    My biggest alarm bells would be the CCJ. Everyone can fall under hard time that leads to having to sell and rent, but assuming they used the process of the sale to provide the 12 months advance payment, and therefore that they had no rent to pay monthly, how could they get themselves in a situation to not pay £1,100 resulting in a CCJ. If they can't afford that, how will they afford rent in addition to their current bills?
    • sacha28
    • By sacha28 12th Jul 17, 4:56 PM
    • 741 Posts
    • 1,130 Thanks
    sacha28
    Thanks for the comment. I hold 6 weeks of deposit. And the tenants said they would find a guarantor. If guarantor passes referencing it would be easier I guess.
    The contract says: Should the contract have become a periodic, after the fixed term, one month's notice given... etc. So we do not need to make a new contract?
    Originally posted by hoyalove
    When you say YOU hold 6 weeks of deposit, I'm assuming (and hoping) you mean that you took reciept of the money then placed it into a deposit scheme?
    • Guest101
    • By Guest101 12th Jul 17, 5:03 PM
    • 14,625 Posts
    • 14,349 Thanks
    Guest101
    My biggest alarm bells would be the CCJ. Everyone can fall under hard time that leads to having to sell and rent, but assuming they used the process of the sale to provide the 12 months advance payment, and therefore that they had no rent to pay monthly, how could they get themselves in a situation to not pay £1,100 resulting in a CCJ. If they can't afford that, how will they afford rent in addition to their current bills?
    Originally posted by FBaby
    its very possible the court papers went to their old address and this is the first they've heard of it
    • tom9980
    • By tom9980 12th Jul 17, 5:56 PM
    • 1,218 Posts
    • 3,668 Thanks
    tom9980
    When you say YOU hold 6 weeks of deposit, I'm assuming (and hoping) you mean that you took reciept of the money then placed it into a deposit scheme?
    Originally posted by sacha28
    The landlord can hold it when they use an insurance backed scheme so you are actually wrong when you make the assumption its not protected if the landlord holds the cash. It should obviously be protected.
    “In order to change, we must be sick and tired of being sick and tired.”
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,062Posts Today

7,145Users online

Martin's Twitter