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LL Charging Daily Interest & Late Fees - Please help!
dangermummy
Posts: 8 Forumite
I have posted previously on here for help with my LL from hell, and have had some excellent and much appreciated advice. However, as is with the case when delaing with such LLs, I would again appreciate some guidance.
I have an AST for 6 months (ends 19 Sep) for which I pay £525.00 pcm direct to my LL. I used to pay this via a LA, but in March the LA ceased trading and my LL insisted on me signing a new TA, even though the previous TA was on a rolling contract. I was told to sign the new one, or she would serve a section 21.
Since signing, this woman has been obstinate, bullying, unreasonable and intimidating (to be fair; always in writing, never in person). She has attempted to make claim for previous rent payments she says were never made to her from me, and has been very vindictive in her chasing of this money. She has attempted all number of ways to intimidate me into making payments I do not have to make by threats of legal action, threats of a claim for misrepresentation, continual references to 'criminal matters' and lying in regards to the Liquidators of the LA, whom she has offered many lies to be about so called meetings and demands from me from the liquidators. The woman is a nightmare. I dread the sound of droppage from the postbox after 12pm, as I know it will be her with one of her new harrassment letters.
Whilst I have many issues with this LL, I would specifically like advice on interest charges and late fees. I have done some hunting, but there is quite a lot of conflicting advice around.
In March 2011, I noticed an error on my Tax Credit award notice, which had my partners earnings at 3 times the actual amount he had earned. Despite phoning them immediately, my WTC payments stopped in April. They promised they would have the issues sorted by 20 June, but I am now being told there is a backlog and they still have not processed my backpayment due from them.
When these WTC stopped, my household fell into financial hardship. Our budgets were already tight, and so I was struggling without the extra WTC payments. I am still in the same financial position.
I explained all of the above to my LL, before the first late rental payment, and informed her of exact dates when payments would be made. Where I offered her such dates, I have always paid the amount promised on these dates.
I initially told her 'I am hopeful that all arrears will be cleared by (but hopefully before) 20 June 2011, as this is the date that HMRC Tax Credits has given as the latest the claim should be rectified.' I have since updated her regularly on the Tax Credit situation, informing her of what has been said over the telephone, as well as letting her know when I will call Tax Credits again to offer her another update. As well as this, I have been making payments wherever possible in order that I do not fall two months into arrears and risk a PO being granted (I have a 2yr old boy, and no money to move at present).
The TA states that 'any late payments will be subject to a fixed penalty of £35.00 payable immediately'. This is stated on a seperate sheet from the tenancy agreement, which lists a number of other T&Cs not included in the main agreement/small print.
The small print has the usual 'to pay the LL reasonable costs as reasonably incurred.....etc'.
There is also a clause in the contract to pay 'an interest charge of 4% above the BOE base rate from time to time prevailing on any rent or other money lawfully due from the T under this TA which remains unpaid for more than 14 days, interest to be charged daily from the date the payment fell due until payment'.
Being the kind hearted soul that she is, when I fell 14 days late with my May rent, she activated this clause. There was a total outstanding of £265.00; to the date the rent was paid (33 days) she has added £431.46 in interest charges, a total charge of 164% of the original arrears.
Whilst I have managed through begging, stealing and borrowing to clear May's rent, I am now in arrears on June's full rent of £525.00 (it was due 21 June). In a statement sent yesterday she has added interest of £496.12 on these arrears, which will continue to accrue until the arrears are paid. That's a charge of 94% of the original arrears to date, and this will only get higher. At 4.5% per day, I am accruing interest of £23.63 per day.
Whilst I understand that a 4% above BOE base rate interest charge is fair, surely this is annually and not daily?! I have no hope of ever clearing this debt at this rate. She has also stipulated ion her last letter that any payments made by me will be credited to the arrears and interest in date order, meaning that even if I make a payment of the full £525.00 now (which I have no way of doing), this would actually be used to clear the £430.00+ interest charge from May, and not clear any rent. Surely this is unfair, as I will be forced to go into arrears every month as monies will be used to pay the interest and not the rental payments.
Any help or guidance you can offer would be much appreciated; I am very stressed with having to deal with a restricted income at the moment through no fault of my own, and this is making a bad situation unbearable. I would also pint out that I am an advocate for paying rent; it is my first priority and it would never be my wish not to pay. The only reason I am falling late is because I do not have the money to pay. As soon as Tax Credits get their behinds into gear and make the backpayment, the arrears and late penalty fees will be paid.
Many thanks in advance!
I have an AST for 6 months (ends 19 Sep) for which I pay £525.00 pcm direct to my LL. I used to pay this via a LA, but in March the LA ceased trading and my LL insisted on me signing a new TA, even though the previous TA was on a rolling contract. I was told to sign the new one, or she would serve a section 21.
Since signing, this woman has been obstinate, bullying, unreasonable and intimidating (to be fair; always in writing, never in person). She has attempted to make claim for previous rent payments she says were never made to her from me, and has been very vindictive in her chasing of this money. She has attempted all number of ways to intimidate me into making payments I do not have to make by threats of legal action, threats of a claim for misrepresentation, continual references to 'criminal matters' and lying in regards to the Liquidators of the LA, whom she has offered many lies to be about so called meetings and demands from me from the liquidators. The woman is a nightmare. I dread the sound of droppage from the postbox after 12pm, as I know it will be her with one of her new harrassment letters.
Whilst I have many issues with this LL, I would specifically like advice on interest charges and late fees. I have done some hunting, but there is quite a lot of conflicting advice around.
In March 2011, I noticed an error on my Tax Credit award notice, which had my partners earnings at 3 times the actual amount he had earned. Despite phoning them immediately, my WTC payments stopped in April. They promised they would have the issues sorted by 20 June, but I am now being told there is a backlog and they still have not processed my backpayment due from them.
When these WTC stopped, my household fell into financial hardship. Our budgets were already tight, and so I was struggling without the extra WTC payments. I am still in the same financial position.
I explained all of the above to my LL, before the first late rental payment, and informed her of exact dates when payments would be made. Where I offered her such dates, I have always paid the amount promised on these dates.
I initially told her 'I am hopeful that all arrears will be cleared by (but hopefully before) 20 June 2011, as this is the date that HMRC Tax Credits has given as the latest the claim should be rectified.' I have since updated her regularly on the Tax Credit situation, informing her of what has been said over the telephone, as well as letting her know when I will call Tax Credits again to offer her another update. As well as this, I have been making payments wherever possible in order that I do not fall two months into arrears and risk a PO being granted (I have a 2yr old boy, and no money to move at present).
The TA states that 'any late payments will be subject to a fixed penalty of £35.00 payable immediately'. This is stated on a seperate sheet from the tenancy agreement, which lists a number of other T&Cs not included in the main agreement/small print.
The small print has the usual 'to pay the LL reasonable costs as reasonably incurred.....etc'.
There is also a clause in the contract to pay 'an interest charge of 4% above the BOE base rate from time to time prevailing on any rent or other money lawfully due from the T under this TA which remains unpaid for more than 14 days, interest to be charged daily from the date the payment fell due until payment'.
Being the kind hearted soul that she is, when I fell 14 days late with my May rent, she activated this clause. There was a total outstanding of £265.00; to the date the rent was paid (33 days) she has added £431.46 in interest charges, a total charge of 164% of the original arrears.
Whilst I have managed through begging, stealing and borrowing to clear May's rent, I am now in arrears on June's full rent of £525.00 (it was due 21 June). In a statement sent yesterday she has added interest of £496.12 on these arrears, which will continue to accrue until the arrears are paid. That's a charge of 94% of the original arrears to date, and this will only get higher. At 4.5% per day, I am accruing interest of £23.63 per day.
Whilst I understand that a 4% above BOE base rate interest charge is fair, surely this is annually and not daily?! I have no hope of ever clearing this debt at this rate. She has also stipulated ion her last letter that any payments made by me will be credited to the arrears and interest in date order, meaning that even if I make a payment of the full £525.00 now (which I have no way of doing), this would actually be used to clear the £430.00+ interest charge from May, and not clear any rent. Surely this is unfair, as I will be forced to go into arrears every month as monies will be used to pay the interest and not the rental payments.
Any help or guidance you can offer would be much appreciated; I am very stressed with having to deal with a restricted income at the moment through no fault of my own, and this is making a bad situation unbearable. I would also pint out that I am an advocate for paying rent; it is my first priority and it would never be my wish not to pay. The only reason I am falling late is because I do not have the money to pay. As soon as Tax Credits get their behinds into gear and make the backpayment, the arrears and late penalty fees will be paid.
Many thanks in advance!
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Comments
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Your LL *cannot* simply rack up late payment "penalty" fees and interest payments in this way: she can put whatever clauses she likes in her tenancy agreements but it does not mean that they will withstand a formal challenge.
However, you also need to address the fact that your rent payments *have* to be a priority for you unless you want to lose the roof over your head. Bear in mind too that if you are evicted due to rent arrears you will be classed as "intentionally making yourself homeless". Your problems with WTCs is nothing to do with the LL.
Write asking her for a formal Statement of Rent and get yourself along to the local Council's Tenancy Relations Officer (private sector rentals) . You may also find it helpful to speak to someone at Shelter - the lines are always busy so you will need to be persistent.
Edit: Whilst it is the courts that decide whether a contract term is actually unenforceable you may be interested to read these two sections from the OFT ( Office of Fair Trading):3.46 We regard a requirement to pay unreasonable interest on arrears of rent, at a rate substantially above the clearing banks' base rates, as an unfair penalty. We regard the imposition of a fixed daily or monthly charge for overdue rent, and regardless of the amount due or the surrounding circumstances, as being penal rather than compensatory in nature, and unfair. Tenants would have to pay more than the cost of making up the deficit caused by their default.Source
4.21 We take the view that it is unfair to change the nature of a debt owing to the landlord by means of a contractual term. We are likely to object to terms that deem outstanding interest, administration or service charges, or any other monies owing to the landlord other than rent, as being rent or provide for them to be deducted from the rent account. Housing legislation provides that arrears of rent may be treated differently from other debts, particularly in relation to eviction, and we consider it is unfair for landlords to seek to enforce these other debts in this way.
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That interest simply doesn't make sense. Assuming you have been charged interest at 4.5%, the daily interest rate is 0.01206% (4.5% ^ (1/365) )
So over 33 days, you would have incurred 0.3987% interest on the original sum, or £1.05 on the original £265 owed. Unless I'm getting my sums wrong, I can't figure where the £496 comes from (even at 4.5% per day).
Her "imaginative" maths is probably the least of your problems, but have confidence that you cannot owe the interest she says you do. Others will be able to give better advice than me on actually dealing with it.0 -
She basically taking the outstanding amount (in this case £265.00), working out what 4.5% of that amount is (in this case £11.93) and adding that charge on everyday the amount is in arrears. She is not charging interest per annum, she is charging PER DAY!!! I don't have a clue as to work out what the actually APR would be over a year by her terms, but I'm thinking even Wonga.com and similar 'financial institiutions' would gawk at the rate!!That interest simply doesn't make sense. Assuming you have been charged interest at 4.5%, the daily interest rate is 0.01206% (4.5% ^ (1/365) )
So over 33 days, you would have incurred 0.3987% interest on the original sum, or £1.05 on the original £265 owed. Unless I'm getting my sums wrong, I can't figure where the £496 comes from (even at 4.5% per day).
Her "imaginative" maths is probably the least of your problems, but have confidence that you cannot owe the interest she says you do. Others will be able to give better advice than me on actually dealing with it.0 -
realy? Does she have a licence to loan money because she needs one? Or does she think she is a loan shark?If you've have not made a mistake, you've made nothing0
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dangermummy wrote: »She basically taking the outstanding amount (in this case £265.00), working out what 4.5% of that amount is (in this case £11.93) and adding that charge on everyday the amount is in arrears. She is not charging interest per annum, she is charging PER DAY!!! I don't have a clue as to work out what the actually APR would be over a year by her terms, but I'm thinking even Wonga.com and similar 'financial institiutions' would gawk at the rate!!
About 950 million percent!
(1.045^365) * 100 = 949,392,873.60 -
Please speak to your Trading Standards as money lebnding without a licence is a criminal offence. Also go down to your Local Council Priate rental officer.
She can charge 8 % - per annum, which what a court would award.If you've have not made a mistake, you've made nothing0 -
dangermummy wrote: »There is also a clause in the contract to pay 'an interest charge of 4% above the BOE base rate from time to time prevailing on any rent or other money lawfully due from the T under this TA which remains unpaid for more than 14 days, interest to be charged daily from the date the payment fell due until payment'.
This clause is fair, but as already pointed the interest rate is per annum.
So if charged daily obviously the computation should convert the per annum rate into a daily rate.0 -
Pay your rent. + her 4.5% ANNUAL interest on arrears.
Count previous additional monies paid as rent. Don't engage with her. Keep letters, keep everything. Don't answer the phone to her. Pay your rent full up, always and on time as soon as you've cleared your arrears. Move out before your fixed term ends. Sit back and let her try to take you to court. Provide evidence of harassment to police if she doesn't back off.0 -
jjlandlord wrote: »This clause is fair, but as already pointed the interest rate is per annum.
So if charged daily obviously the computation should convert the per annum rate into a daily rate.
Sounds like there are 2 possibilities - either LL is totally clueless and has no idea that 4.5% is an annual rate or is deliberately overcharging. I would tend to think it is the first option as even loan sharks wouldn't use a rate of 950 million percent!!Remember the saying: if it looks too good to be true it almost certainly is.0
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