Rent arrears due to hidden late charges

FBaby

Two separate housing benefit payments that add up to £450 and she makes up the other £100, always at the start of the month. £220 and £230 respectively.

Are you saying that her HB payments are every two weeks rather than monthly? Or when you say end of the month, do you mean that this is the following month's HB payment?

It sounds like a bit of a coincidence that you've worked out the amount to be the same than what you say she is suppose to pay extra. Does the contract states that the penalty for late payment is £100?

kelsall_13

Apologies, I'm getting lost in all the comments - I'll try my best to answer them all;

The eviction date is set on a date 2 months after the notice was served, the notice actually says that court proceedings will not begin until two weeks after the notice, on the 18th - I assume giving her two weeks to pay up or be taken to court.

She is requesting a full breakdown from the agents today.

No, a contract was originally signed when she moved in. No late fees were noted in it and it was for 12 months - this later ended up lasting 18 months before the new contract I mentioned arrived. She was under the assumption that the agency just wanted her to re-sign for another 12 months for 'security'. Nothing was mentioned regarding the amendments on anything other than the contract, which I believe is on page 36 of the 40 page document submitted to her. I'm still awaiting a copy of the document from her myself to have a read through.

I believe the date was set as the 10th on the previous contract also but nothing was ever raised when her payment plan, which has never changed, was set up and maintained for the first 18 months.

It was originally a private tenancy set up with her previous significant other, since they split she then had to rely on the DSS. This was pretty early into the tenancy, within a month or so I'm led to believe.

Im not 100% how the rent increase was blocked. In January last year they forced her to pay yet another £1,200 for 'rent arrears' due to an increase in rent they never actually told her about. She panicked and paid it to them before she let me look over the documents they 'alleged' they had sent. I can't comment on why she paid in the first place however as I don't know the details, however, I do know they had never sent this letter explaining the rent increase. She also never signed anything stating she agreed to the said increase and arrears, she just paid. The second attempt at an increase came roughly 5 months after this payment and she phoned the council. From this point they never raised the overall cost due to 'unfairly raising the rent' I believe.

franklee -

She's awaiting all the documentation through from the council to see what was and wasn't agreed.
This is what i'm most positive on pushing forward, they are fully aware of the dates and have only recently made it a problem by forcing this new clause in the new contract, knowing full well what dates the money is sent across.

Again, I still haven't seen the contract - she should send it through today for me to look at. I'll post again when I get back from work. £100 pcm seems extremely excessive to me also, especially without notifying her.

Thank you for those notices, I'll pass them on for her to read.

FBaby -

I don't quite know how the HB work, I've never actually claimed a penny in my life! I would've assumed there were two within the two weeks which land prior to the 10th deadline, as the council are paying and know the agreement after all...

EDIT - I'm just in a whatsapp dialogue with her - she's given the contract over to a solicitor and is currently in their lobby. It does state that its a £100 late fee 'charge' though, her words. Would that be construed as an unfair 'penalty' and unenforceable, as Franklee noted?

Thanks again for the help!

Comms69

kelsall_13 wrote: »

Apologies, I'm getting lost in all the comments - I'll try my best to answer them all;

The eviction date is set on a date 2 months after the notice was served, the notice actually says that court proceedings will not begin until two weeks after the notice, on the 18th - I assume giving her two weeks to pay up or be taken to court. - It's 2 months. not 2 weeks!

She is requesting a full breakdown from the agents today.

No, a contract was originally signed when she moved in. No late fees were noted in it and it was for 12 months - this later ended up lasting 18 months before the new contract I mentioned arrived. She was under the assumption that the agency just wanted her to re-sign for another 12 months for 'security'. Nothing was mentioned regarding the amendments on anything other than the contract, which I believe is on page 36 of the 40 page document submitted to her. I'm still awaiting a copy of the document from her myself to have a read through.

I believe the date was set as the 10th on the previous contract also but nothing was ever raised when her payment plan, which has never changed, was set up and maintained for the first 18 months.

It was originally a private tenancy set up with her previous significant other, since they split she then had to rely on the DSS. This was pretty early into the tenancy, within a month or so I'm led to believe.

Im not 100% how the rent increase was blocked. In January last year they forced her to pay yet another £1,200 for 'rent arrears' due to an increase in rent they never actually told her about. She panicked and paid it to them before she let me look over the documents they 'alleged' they had sent. I can't comment on why she paid in the first place however as I don't know the details, however, I do know they had never sent this letter explaining the rent increase. She also never signed anything stating she agreed to the said increase and arrears, she just paid. The second attempt at an increase came roughly 5 months after this payment and she phoned the council. From this point they never raised the overall cost due to 'unfairly raising the rent' I believe.

franklee -

She's awaiting all the documentation through from the council to see what was and wasn't agreed.
This is what i'm most positive on pushing forward, they are fully aware of the dates and have only recently made it a problem by forcing this new clause in the new contract, knowing full well what dates the money is sent across.

Again, I still haven't seen the contract - she should send it through today for me to look at. I'll post again when I get back from work. £100 pcm seems extremely excessive to me also, especially without notifying her.

Thank you for those notices, I'll pass them on for her to read.

FBaby -

I don't quite know how the HB work, I've never actually claimed a penny in my life! I would've assumed there were two within the two weeks which land prior to the 10th deadline, as the council are paying and know the agreement after all...

EDIT - I'm just in a whatsapp dialogue with her - she's given the contract over to a solicitor and is currently in their lobby. It does state that its a £100 late fee 'charge' though, her words. Would that be construed as an unfair 'penalty' and unenforceable, as Franklee noted?

Thanks again for the help!

In anycase, s.21 requires no fault, so she will eventually be evicted. So perhaps it's a good opportunity to move in together and put this behind her.

G_M

This is still unclear.

For proper advice you need to be very precise!

kelsall_13 wrote: »

The eviction date is set on a date 2 months after the notice was served, the notice actually says that court proceedings will not begin until two weeks after the notice, on the 18th - I assume giving her two weeks to pay up or be taken to court.
Please give the EXACT DATES:
1) it was served
2) it expires

Expiry should be at least 2 months later.

The 2 weeks sounds like an extra grace period, but this is not clear.

She is requesting a full breakdown from the agents today.
Please let us know.
* how much is actul arrears and for what period(s)?
* how much is fees for late payment?

No, a contract was originally signed when she moved in. No late fees were noted in it
Do mean the contract did not include late fees, or she did not note (see) them?
and it was for 12 months - this later ended up lasting 18 months before the new contract I mentioned arrived. She was under the assumption that the agency just wanted her to re-sign for another 12 months for 'security'.
Yes but did she actually sign it? If so, the original contract becomes irrelevant.

Nothing was mentioned regarding the amendments on anything other than the contract, which I believe is on page 36 of the 40 page document submitted to her. I'm still awaiting a copy of the document from her myself to have a read through.
So the fees were in the contract which (I think) see signed.

I believe the date was set as the 10th on the previous contract also but nothing was ever raised when her payment plan, which has never changed, was set up and maintained for the first 18 months.
Assuming she signed this 2nd contract, what was the payment date within it? The date in the 1st contract became irrelevant as soon as she signed the 2nd.

It was originally a private tenancy set up with her previous significant other, since they split she then had to rely on the DSS. This was pretty early into the tenancy, within a month or so I'm led to believe.
Who is named as the tenant on the 2nd contract (assuming she signed it)? Hers only, or hers plus ex-partner?

Im not 100% how the rent increase was blocked.
so a mystery......
In January last year they forced her to pay yet another £1,200 for 'rent arrears' due to an increase in rent they never actually told her about. She panicked and paid it to them before she let me look over the documents they 'alleged' they had sent. I can't comment on why she paid in the first place however as I don't know the details, however, I do know they had never sent this letter explaining the rent increase. She also never signed anything stating she agreed to the said increase and arrears, she just paid.
Having ad this, did she then eiter
* claim it ack or
* deduct it from future payments
since you say the rent increase on which these arrears were based was 'blocked'?

Might the current arrears be related to this 'blocked' rent increase? too?

If so, the question of how the increase was introduced, and then 'blocked' might become highly relevant.

The second attempt at an increase came roughly 5 months after this payment and she phoned the council. From this point they never raised the overall cost due to 'unfairly raising the rent' I believe.

I don't unerstand
1) the council has no say about private rent increases
2) was this 2nd 'attempt' successful or not? How was it implemented?
3) or did she get a written stattement that the rent increase was not tto be implemeted? When? From who?

franklee -

She's awaiting all the documentation through from the council to see what was and wasn't agreed.
????
What has the council got to do with the tenancy?
I understood this tto be a private tenancy managed by an agency.
Is this not the case?
Is this a council tenancy?

This is what i'm most positive on pushing forward, they are fully aware of the dates and have only recently made it a problem by forcing this new clause in the new contract, knowing full well what dates the money is sent across.
I think you had better check who the landlord is!
Council?
Private individual?
Company?
It will be named on the tenancy agreement.

...

I don't quite know how the HB work, I've never actually claimed a penny in my life! I would've assumed there were two within the two weeks which land prior to the 10th deadline, as the council are paying and know the agreement after all...

EDIT - I'm just in a whatsapp dialogue with her - she's given the contract over to a solicitor and is currently in their lobby. It does state that its a £100 late fee 'charge' though, her words. Would that be construed as an unfair 'penalty' and unenforceable, as Franklee noted?

Thanks again for the help!

If there was, say, a £10 late payment fee in the contract, and she paid late on 10 consecutive months, that would = £100

Annie35

Is it that the agency increased the rent but the council said 'no' to more hb? & gf assumed increase had been blocked but this is actually the arrears?

silvercar

It was originally a private tenancy set up with her previous significant other, since they split she then had to rely on the DSS. This was pretty early into the tenancy, within a month or so I'm led to believe.

Sounds like she relied on the DSS to such an extent that she just paid over the HB she received without ensuring it was enough to pay the rent in full or making sure it was with the landlord or agent on the date agreed in the tenancy.

Old HB used to be paid fortnightly in arrears, current LHA is paid 4 weekly but still in arrears. Relying on both with no input yourself risks running up a shortfall and being late paying every single month.

G_M

Annie35 wrote: »

Is it that the agency increased the rent but the council said 'no' to more hb? & gf assumed increase had been blocked but this is actually the arrears?

Sounds like she relied on the DSS to such an extent that she just paid over the HB she received without ensuring it was enough to pay the rent in full or making sure it was with the landlord or agent on the date agreed in the tenancy.

seems increasingly likely.

And talking to the council is a wase of time if the tenancy is a private one.

kelsall_13

Hi again all

No the fee is 100% an accumulation of 13 late payments and this months rent of £550.00 - over half of this has already been paid however. This was confirmed via phone call earlier, we're still awaiting the written charge break down.

Nothing has been sent through regarding increased rent payments, it was just a phone call. The latest documentation detailing the rent is that it is set at £550.00. She has now confirmed that because she was still under contract for another 5 months at that point they couldn't put the price up.

The date was set at the 10th, as I've said previously.

So what I do know now is that the actual chargeable sum will be £1,310 - the £550 will be removed from this months rent and the agency has agreed to not charge late fees until the termination in April.

Moving forward I have consulted the OFT356 and this £1,310 is construed as an excessive penalty in my eyes, regardless of how it was pre-estimated. Once I've received a response from the tenancy agency with a full breakdown of the figure I may be stand corrected

It is as follows;

Group 5: Financial penalties

!!!8211; paragraph 1(e) of Schedule 2

3.44 Schedule 2, paragraph 1,
states that terms may be unfair if they have the object or effect of:
(e) requiring any consumer who fails to fulfil his disproportionately high sum in compensation.

3.45 It is unfair to impose excessive sanctions for a breach of contract. A term that requires the tenant to pay more in compensation for a breach than a reasonable pre-estimate of the loss caused to the landlord is likely to be void as a penalty under common law. Other types of excessive sanction are considered in Chapter 4, Group 18(c).

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.

Group 18(c): Unfair enforcement powers

4.15 We consider there is an unfair imbalance in a contract if it gives one party
the power to impose disproportionately severe penalties on the other, or if it
misleadingly threatens sanctions over and above those that can actually be
imposed. See also our views about financial penalties in Group 5.39

I've also been consulting other people which gave me this advice. They state that the penalty is hard to enforce in a court as the figure was obviously an estimate written into the contract. Again all I can say is we will know more when the agency finally reply to me.

Thoughts?

[Deleted User]

What did the solicitor say? I assume she was seeing a solicitor about her rent situation?

FBaby

This is going to be a difficult one because ultimately, they only applied the terms of the contract she signed and agreed to, ie. to pay rent on X date and that late charges would apply if she didn't. Yes, it is unfair that they didn't send her any notification of this, but they don't have to because from their perspective, if she'd read her contract carefully, she would have known that this would happen without them having to tell her.

I agree that the late fee amount seems excessive, but she signed up to it. It is a costly mistake to make but a good lesson to learn, always always read any contract you sign carefully and accept your liability to ensure you follow its terms. This is why you agree and sign to a contract, it protects both parties to certain terms.