Section 8 vs section 21 - non payment of rent query

lyndasharp

We became landlords in January when we finally gave up trying to sell my husbands flat. It's under full management with an agency as we live some distance away.

Unfortunately the first tenant they've found, after passing all the checks, has only paid the first months rent. The neighbour thinks he has decided to spend his money on alcohol instead.

The tenant was given a section 21 notice at the start of the tenancy (which expires mid July), and has now been served a section 8 by the lettings agency. They are now recommending we contact a solicitor to take him to court under section 8 for the missing rent, and to remove him from the flat.

Have any other landlords been in a similar position, if so did you would you mind sharing your experience? Did you go down the section 8 route, or might we be better off waiting until his tenancy expires then going through the small claims court (and evicting if necessary)? We're concerned about spending lots on a solicitor, in case he just decides to refuse to pay and disappears / declares bankruptcy, in which case we'd be much worse off!!!

Jowo_2

Can't answer all your queries but I've seen recommendations on landlord forums for a belt and braces approach for tenants with rent arrears to serve them both an S21 and an S8.

This is because a judge will give possession to the landlord on a mandatory basis through the S8 route if, at the time of serving it AND at the time of the court case, the tenant owes 2 months rent (if paid monthly). However, some tenants will pay the arrears down to just under 2 months in time for the court case to thwart possession. Most other grounds are discretionary.

That's why they've probably recommended both notices - S21 as a fall back.

Did you get to see the tenant screening report that the agency undertook or have you taken their word for the character of the tenant? there's an article on landlordzone to inform a landlord how to select a good agency.

By the way, this isn't a recommendation as I've not used them, but you could check if someone like Landlord Action could be cheaper than a solicitor.

Fire_Fox

lyndasharp wrote: »

We became landlords in January when we finally gave up trying to sell my husbands flat. It's under full management with an agency as we live some distance away.

Unfortunately the first tenant they've found, after passing all the checks, has only paid the first months rent. The neighbour thinks he has decided to spend his money on alcohol instead.

The tenant was given a section 21 notice at the start of the tenancy (which expires mid July), and has now been served a section 8 by the lettings agency. They are now recommending we contact a solicitor to take him to court under section 8 for the missing rent, and to remove him from the flat.

Have any other landlords been in a similar position, if so did you would you mind sharing your experience? Did you go down the section 8 route, or might we be better off waiting until his tenancy expires then going through the small claims court (and evicting if necessary)? We're concerned about spending lots on a solicitor, in case he just decides to refuse to pay and disappears / declares bankruptcy, in which case we'd be much worse off!!!

The longer you leave it the more money the tenant owes and the less likely you are to see it back. Any costs can be awarded against the tenant and you may be able to get an attachment of earnings if the tenant is employed. If the tenant is not presently working and is claiming LHA then you can apply to the council to have the rent paid directly to you once the tenant is eight weeks in arrears (which appears to be the case). If the tenant abandons the property leaving arrears, you will have a hell of a task getting anything back as you need a residential address for the court.

If the tenant doesn't move out in July you are still going to have to go to court to get him evicted - which will be another month or so assuming you have served the S21 correctly. There are no circumstances in which you can simply walk in to the flat and take possession yourself - not even when you suspect abandonment. What vetting process did the letting agency do? As you are paying them for full management I'd be going through the file with a fine tooth comb and checking out each reference myself.

lyndasharp

Thanks for your replies so far. Yes, the tenant does work. Looking into an attachment of earnings sounds like a good idea, might have more chance of seeing some money then!

He had just split up from his wife when he moved it, and so I guess when living with his wife all the credit records and references were fine, maybe he hasn't coped well with the split or living alone????

Jowo_2

Concentrate on getting him out and make sure you don't get sucked into their personal problems and sob stories. Be business like and communicate in writing.

Many people who have small claims court judgements against them don't ever pay and manage to successfully evade enforcement. For example, someone I know has tried to recover money owed through an attachment of earnings and the defendent simply changes jobs and accommodation everytime the debt collectors/courts catches up with them. In fact, they simply transfer to a new office for the same company, taking a break of a week, so they can claim not to work for the company anymore, then take up a new position just down the road. To date, the defendent owes at least 4 different organisations money and has never paid a penny.

Fire_Fox

lyndasharp wrote: »

He had just split up from his wife when he moved it, and so I guess when living with his wife all the credit records and references were fine, maybe he hasn't coped well with the split or living alone????

Don't guess, check that all the references are genuine. Be careful you do NOT mention arrears to his boss/ previous landlord as you will be breaching data protection if you do. Why is it relevant whether your tenant is coping? This is business and he has signed a legally binding contract. Did the letting agency set up a DD or SO for payment? If so the tenant need make no effort in order to pay his rent, are you sure he is still employed?

tbs624

You may want to consider signing up to LL Law see this page

lyndasharp

Fire_Fox wrote: »

Don't guess, check that all the references are genuine. Be careful you do NOT mention arrears to his boss/ previous landlord as you will be breaching data protection if you do. Why is it relevant whether your tenant is coping? This is business and he has signed a legally binding contract. Did the letting agency set up a DD or SO for payment? If so the tenant need make no effort in order to pay his rent, are you sure he is still employed?

Coping with his marriage breakup isn't relevant overall. It's just my suggestion as to why the references were fine when he applied and why things have gone downhill quickly.

However after the Feb rent went unpaid he then avoided all calls and not opening mail, letting agency finally caught up with him in March where he claimed to be seriously ill and having chemo, there were also other claims about him being so ill he'd moved in with family for a while. However the neighbour says he is definitely living there and the LA inspections show that he's in the flat and using it. While it is vaguely possible that he's telling the truth I strongly suspect he's just trying any means possible to avoid payment. :eek: We do believe he's still working though, as the LA have also been trying to contact him through work, and I presume they'd have said if he'd left.

He paid the first month and the deposit up front, and it was agreed that he'd set up a SO to pay the following months. He clearly never bothered to do that!

If the refernces turned out not to be genuine, what would happen then? Does it actually make any difference overall?

Jowo_2

Just get him out - concentrate your efforts in this area. When is the court case or likely date according to the local courts average waiting time?

Can't answer your question on references but I expect if you can prove they are fake, they can be cited as one of the relevant grounds.

Has the agency given you a copy of his tenancy application form and their tenant screening report? Does the agency belong to a professional body, such as ARLA? Are you sure the agent even undertook any checks?

Also, generally landlords are advised not to contact the tenants relatives (except if they are guarantors) or at their place of work, in order to avoid this being seen as harassing them.

The landlordzone website will have good information on how to deal with tenant arrears and serving them notice, plus the legal process to take them to court for unpaid rent. The HM court website will have info on how to enforce a judgement (CCJ).

"It is unlikely that landlords will ever recover all outstanding losses in many rent arrears cases and the best solution is often re-possession and to re-let quickly to minimise your loss.
Debt Recovery can be expensive and time consuming, but it is sometimes cost effective to do-it-yourself using the Small Claims Court.
Experience shows that avoiding litigation if at all possible, writing off small short-term losses, and moving on as quickly as possible, is the best overall landlording policy."

http://www.landlordzone.co.uk/rent%20arrears.htm
http://www.landlordzone.co.uk/rent_arrears_evictions.htm

Fire_Fox

lyndasharp wrote: »

We do believe he's still working though, as the LA have also been trying to contact him through work, and I presume they'd have said if he'd left.

He paid the first month and the deposit up front, and it was agreed that he'd set up a SO to pay the following months. He clearly never bothered to do that!

If the refernces turned out not to be genuine, what would happen then? Does it actually make any difference overall?

His employers will not be able to tell the letting agents if the tenant has resigned, been sacked, off sick or right as rain due to data protection! I would be VERY careful about contacting him at work, creditors are simply not allowed to do anything that may jeopardise someone's job and must be careful not to be accused of harassment. This comes up regularly on the Debt-free Wannabe board, so you may wish to run a search there. If the references turn out not to be genuine I would be seeking any losses incurred against the letting agency. I suspect you will have to chase the tenant in the first instance, but that gives you a fall back position as they are far less likely to go 'underground'.

tbs624

Presumably you will need to re-let this flat to cover your costs until you can sell? As well as looking at LLLaw as previously suggested, join up to one of the national LL associations or a local affiliated branch. Membership fee tax deductible, insurance discounts available and much support and helpful advice available.

As a newbie LL you clearly need support with serving of Notices, potential court hearings etc - get it wrong and it will cost you more than it would have done to have dealt with it properly in the first place. See NLA , RLA, LLlaw.

It's vital that you fully understand your rights and obligations, as well as those of your T, even if you do use an LA. Bear in mind that LAs don't have to have any particular expertise, qualification or training to be able to set themselves up in business dealing with your property , your money and your tenant's deposit.

I think you also need to clearly separate the facts from the hearsays and the presumptions such as -

lyndasharp wrote: »

The neighbour thinks he has decided to spend his money on alcohol instead.

lyndasharp wrote: »

However after the Feb rent went unpaid he then avoided all calls and not opening mail, letting agency finally caught up with him in March ..

How do you know that the T was "not opening mail" - or do you simply mean he failed to respond to letters?

lyndasharp wrote: »

...and it was agreed that he'd set up a SO to pay the following months. He clearly never bothered to do that!

Your LA appears to be very lax: Ts are usually provided with an SO form which is completed there & then and the LA should ensure it goes straight to the T's bank.

You also mention

lyndasharp wrote: »

the LA inspections show that he's in the flat and using it.

Inspections plural when the tenancy is barely into three months? Doesn't look good when combined with the LA phoning the T at work.......


Your T may have genuine difficulties of one sort or another ( which you can't afford to be swayed by) or he may be one of those Ts who knows how to work his way around an inexperienced LL and a sloppy LA.

Either way, the three links provided can give you the information that you need.

You may also want to look at exactly what your LA provides in return for their fat fee.