Tenant not paying rent and uncontactable...please help!

ChinUp_2

I'm trying to help my sister who is having problems with her tenant.

The tenant is currently on a 12 month shorthold tenency agreement (previously was on a 6 month contract) which started in February 2012. The tenant lives in the property on her own, receives housing benefit and also works up to 16 hours a week. The housing benefit nearly covers the whole of the rent and so she only has to add £40 a month of her own money to cover the rest.

The tenant pays rent every two weeks, she is persistently late with rent payment, underpays and more of late hasn't paid any rent at all. She has now missed rent payments for 6 weeks and also owes money from previous rents which she has underpaid. My sister has been in contact, chasing the money for the last 4 weeks and at first the tenant gave her excuses and said it will be paid etc. Two weeks ago my sister posted a letter outlining the late payments and she heard nothing. The tenant wasn't answering her phone, wasn't at the property, wasn't on facebook etc. Last week the tenant contacted her by phone to say she was in hospital as her ex boyfriend had beat her up and then she was kept in due to anxiety and mental health issues. She has said that she has had to agree to stay in the hospital for another 2 weeks and if she didn't agree they would section her. She said that her mum would help her make the rent payments, then she went silent again. My sister has not heard anything and has no way of contacting her. Even if she posted a letter, the tenant would not get it until she came out of hospital.

My sister is very worried now and needs the rent money to pay her mortgage. What can she do? She obviously wants the rent money she is owed but also has had enough and would like to evict her as she cannot be trusted to pay the rent. It's frustrating to think she is getting paid housing benefit but is not passing it on to pay for her rent.

Any help would be appreciated. I've tried to look into things but to be honest I'm finding it quite confusing and don't want to get anything wrong. How can my sister issue a letter when we know she won't actually receive it until she is back home...and who knows how long this will be? is it a section 8 she needs to issue?

Thanks

BitterAndTwisted

Let me get this straight: although the tenant did not have their rent-account paid up to date in February your sister offered them another 12 MONTHS fixed-term agreement?

It doesn't matter whether this bint is in hospital or not: there's not much your sister can do until her tenant is in two month's of arrears. She could consider speaking to the Local Authority to have the HB/LHA paid direct to her but there are risks attached to taking that route as well as th tenant needing to agree to it as well.

She needs the rental-income in order to be able to pay the mortgage? Tough, but those are the risks when you go into business as a landlord and you don't have the cash-reserves in order to weather the inevitable storms..

In the meantime your sister should join a landlords association toute flaming suite. All of the information and guidance about Section 8s and lots of other useful things will themn be at her disposal. The cost of membership can be offset against the rental-income for tax-purposes. I'm assuming she's declaring the rent as income to HMRC.....

ChinUp_2

The tenant paid on time for the first six months which is why my sister agreed to a 12 month contract. Once the tenant is in 8 weeks arrears what would you suggest? My sister has got some cash reserves but they are fast dwindling away.

G_M

As soon as the arrears reach 2 months (not 8 weeks unless the tenancy agreement stipulates weekly payment - in which case a rent book is mandatory) issue a S8.

If you/she are not familiar with this process, as Bitter& says, join a LL association (links at the bottom of this post) and get professional help

1981trouble

Your sister needs to speak to the council to inform them she is in arrears (preferably have exactly how far behind she is including the part payments etc so if it is 6.25 weeks that is how much as you may be closer to the 8 weeks than you initially realised).

She can apply for the hb to be paid directly to her - I think she needs 8 weeks of arrears officially for it to be authorised without tenant agreement (council will be able to confirm it), we did this and it was agreed with only 6 weeks arrears so I presume our tenant agreed to it rather than us waiting. Obviously she will still have the additinoal payment arrears but it's better than nothing.

Once she is 8 weeks/2 months in arrears you can look at issuing a section 8 to apply to the courts for eviction, however as soon as she pays enough off to not be 8 weeks (so could be 7weeks and 6 days) in arrears that s8 is pretty much null and void - or at least that is my understanding of it, i'm sure some kind soul on here will correct it if I have misunderstood.

ChinUp_2

Thanks for the replies, I'll get her to go to the council to explain the situation. If she issues a section 8 will just posting it through the tenants letter box be enough to say it has been "issued" even though the tenant will not know its there if she is in hospital?

G_M

ChinUp wrote: »

Thanks for the replies, I'll get her to go to the council to explain the situation. If she issues a section 8 will just posting it through the tenants letter box be enough to say it has been "issued" even though the tenant will not know its there if she is in hospital?

Yes, provided you have a witness (and a photo of the posting?)
Otherwise post it form 2 separate post offices, with "proof of posting" (NOT recorded delivery which will not get signed for so will be returned.)

BitterAndTwisted

I would advise your sister to not arrange with the council to have the rent paid directly over to her. If the tenant fails to qualify for HB/LHA or is claiming it fraudulently, the council can come to the landlord for any over-payments. Someone who is allegedly claiming benefits could risk having them suspended while they are in hospital for any length of time, if that is truly where she is. Which I doubt.

And a reminder: it's not two months rent owed, it's two months in arrears. Don't forget that rent-due is supposed to be paid monthly in advance, regardless of whether HB/LHA is paid fortnightly in arrears to the tenant.

My own feeling is that your sister should concentrate on getting shot of this tenant asap and find a more reliable one if she is so utterly dependent on the rental-income. There are lots of solvent people out there and many of them rent.

I suggest the very next thing she should do is to prepare a letter to the tenant about the arrears attached to a full rent statement from the very beginning of the tenancy, asking her to bring her rent up to date as a matter of utmost urgency, regardless of whether she believes the tenant will receive it in good time. Usually when someone is in hospital relatives and friends pop round to collect mail and check everything is secure at the property.

Kynthia

Start building a folder of paperwork that includes the tenancy agreement, schedule of payments and monies owed, copies of all correspondance, etc. Then once two months rent is owed post or deliver a valid section 8 with proof of delivery. Don't use recorded delivery as it might not get collected, just use first class postage with proof from the Post Officer or hand deliver with a witness and get them to sign a witness form. Then once the date expires your sister will need to apply to the county court for a possession hearing. That's when you'll be glad you were organised with the paperwork.

Make sure your sister has done everything she's meant to such as gas safety certificate, deposit protected, repairs up to date, etc. You don't want anything to be used as a defence to the possession claim. My tenant tried to claim that not being allowed Sky justified his not paying rent for four months! Thankfully the judge didn't entertain that. :-)

Benji

BitterAndTwisted wrote: »

And a reminder: it's not two months rent owed, it's two months in arrears.

Quite the opposite B&T, on a monthly tenancy it is how much rent is unpaid.

Can we be told:

The commencement date of the 12 month agreement?
Was there an end date specified?
Did the tenant pay a deposit?
When was that deposit protected in a government approved scheme?
Has the tenant been given the schemes 'prescribed information' which can be as much as 15 pages? (and can LL prove it?)
Does the tenancy agreement state that Section 8 (grounds 8 & 10) of the 1988 Housing Act may be used?
How frequently does the agreement say rent is due?
How much is the rent per month?
How much is unpaid?

ChinUp_2

Thanks for the replies, Benji answers to your questions below:
The tenancy commenced on 21/2/12
There was no end date specified but it clearly states 12 months from 21/2/12.
No the tenant didn't pay a deposit. The tenant is someone my sister knew from school, not that this should matter but for some reason my sister felt it was ok not to take a deposit.
The agreement states that the landlord can use the 1988 housing act but I don't think it states section 8 specifically.
The agreement states the rent is due monthly but the tenant asked to pay it fortnightly which is what she had been doing.
The rent is £395 per month
The amount of rent unpaid is currently £725

Thanks in advance for any further advice.