Tenancy in arrears - Advice needed

aimee_coop

Hi all,

I have an apartment which is fully managed by my letting agent. The tenancy started a 5 months ago. The second month of rent was late for a few days. After the agent's 'reminder', he paid the rent the next day. Since then, the rent was paid on time until this month. The rent is already 2 weeks' overdue. My letting agent has sent him 2 letters and texted him twice instead of calling him to remind him to pay the rent because he never answered their calls. I'm starting to be a little worried especially I'm not in the UK to deal with this. 

I have a few questions:

1. I have the tenant's contact number and email, shall I contact him and remind him to pay the rent myself instead of waiting for the letting agent to text him once a week, which I don't think is very effective.

2. Can I start the eviction process at the end of this month if the tenant still hasn't paid the rent?

3. Will the letting agent help with the eviction process? 

4. I have taken out the rent protection and legal expenses insurance. How likely am I going to get my rents back if the tenant really won't pay any?

5. What else can I do for the time being? 


I still haven't paid off my mortgage and so I really need the tenant to pay the rent

Any advice you could give would be much appreciated.

Thank you.

propertyrental

What is the fixed term?6 months? 12? More?

Could serve a s21if it's 6 months.

Or S8 G8 if /when 2 month rent owed.

8 G10 or 11 unlikely to succeed at this stage as they are discretionary.
Schedule 2 (17 S8 Grounds a LL can use)

Agent will not (cannot) go to court -need a solicitor for that though your legal insurance should/may cover that (read the small print).

Post 4: Ending/renewing an AST: what happens when a fixed term ends? How can a LL or tenant end a tenancy? What is a periodic tenancy?

aimee_coop

@propertyrental

It's a fixed term. 3 years... this is only the 5th month...
When I come to think of it, the tenant could have been evicted by his previous landlord even though the referencing report came back positive because the tenant requested for moving within 3 days when signing the tenancy agreement and he was willing to pay over the asking price to get the tenancy offer. I couldn't think of any reasons why he needed to move in so quickly. 
 

RAS

Oh dear.

Have you read the stickie at the top of this page?  Have you ensured that all the required rules have been met, not just allowed the LA to tell you everything is OK.

Do you have consent to let or a BTL mortgage?

Do you belong to a Landlords association?

At a minimum you are going to need to budget 3 months mortgage in hand to prevent getting in mortgage arrears. Assuming that his nibs coughs up a £1 to bring it under 2 months when you issue the S8 notice. 

macman

3 year fixed term? No break clause? Who persuaded you to grant such a long tenancy?
You don't need a solicitor to issue an S8, you can do this yourself, once the tenancy is 2 months in arrears, or the agent can do it for you f you trust them to get it right. Are you confident that the tenancy is regularised (GSC, EIRC, 'How to Rent' booklet supplied, deposit protected)?
Of course you can contact the tenant direct, but don't text or call. Send an LBA setting out the consequences if the arrears are not settled within say 7 days. The problem is that if the tenant goes over arrears of 2 months and then clears it below 2 months after you issue an S8, then it's back to square one again. Without the ability to issue an S21 you are potentially facing a permanent level of arrears.
If there's been no contact for two weeks, then I'd be asking the agent to arrange a drive-by to check if the tenant is still in residence at all.
Lastly, since you are resident overseas, is the tenant or agent deducting the income tax due and paying it directly to HMRC, as is required under the Non-Resident Landlord scheme?

GrumpyDil

I would also be checking the terms of the rent guarantee to see if you need to notify them about the late payments. 

aimee_coop

RAS said:

Oh dear.

Have you read the stickie at the top of this page?  Have you ensured that all the required rules have been met, not just allowed the LA to tell you everything is OK.

Do you have consent to let or a BTL mortgage?

Do you belong to a Landlords association?

At a minimum you are going to need to budget 3 months mortgage in hand to prevent getting in mortgage arrears. Assuming that his nibs coughs up a £1 to bring it under 2 months when you issue the S8 notice. 

Yes. It's a BTL mortgage. Still, I need to cover all the mortgage payments myself if my tenant doesn't pay 

I don't belong to any landlords association. Is this the one you're talking about? 

https://www.nrla.org.uk

Maybe I should join one of these associations now... :')

So... if the tenant does pays £1 to bring it under 2 months, I need to issue the S8 notice all over again after one month, am I right?   

aimee_coop

macman said:

3 year fixed term? No break clause? Who persuaded you to grant such a long tenancy?
You don't need a solicitor to issue an S8, you can do this yourself, once the tenancy is 2 months in arrears, or the agent can do it for you f you trust them to get it right. Are you confident that the tenancy is regularised (GSC, EIRC, 'How to Rent' booklet supplied, deposit protected)?
Of course you can contact the tenant direct, but don't text or call. Send an LBA setting out the consequences if the arrears are not settled within say 7 days. The problem is that if the tenant goes over arrears of 2 months and then clears it below 2 months after you issue an S8, then it's back to square one again. Without the ability to issue an S21 you are potentially facing a permanent level of arrears.
If there's been no contact for two weeks, then I'd be asking the agent to arrange a drive-by to check if the tenant is still in residence at all.
Lastly, since you are resident overseas, is the tenant or agent deducting the income tax due and paying it directly to HMRC, as is required under the Non-Resident Landlord scheme?

The agent. He said it was the best offer and I believed it

I think the tenancy is regularised.  The deposit is protected. I've got a copy of the tenancy deposit protection certificate.

The letting agent did send 2 LBAs and will do it again next week if the tenant still hasn't paid. 

I think I really should ask the agent to arrange a drive-by. Didn't think of that! Thanks for the advice!!!

The agent does not deduct the income tax because I have already got the individual NRL approval from HMRC.

I haven't received any rents so far because all the rents the tenants paid earlier have all been used to pay the letting fees and other initial fees. I am supposed to receive the first full rent this month! I was so looking forward to it and now it has become a nightmare

RAS

There's a long list of things that need to be in place before you can sue for repossession, macman mentioned some but there are more in the stickie at the top of this forum. READ it.

It doesn't matter whether you think the tenancy is regularised, you need to confirm it. Get every bit of necessary paperwork sorted and filed.

Have you considered the possibility that the tenant may have done some DIY and be gardening indoors? 

Where did they live before moving into your house? You should at least be able to check the electoral roll for that address. Not absolutely correct, as some people avoid the public register, but worth a look.

aimee_coop

Thanks @RAS

I will take some time to read the stickie. Hopefully it's not too late...

The apartment is a new-build, I hope he's not doing any DIY or anything illegal indoors

He lived in the same area before he moved into my apartment. It was a house though. But I couldn't find his name on the electoral register using his previous address. Probably he didn't make it public. 

I think I really should talk to my letting agent about the follow-up actions. What they are doing is not very helpful so far

macman

aimee_coop said:

RAS said:

Oh dear.

Have you read the stickie at the top of this page?  Have you ensured that all the required rules have been met, not just allowed the LA to tell you everything is OK.

Do you have consent to let or a BTL mortgage?

Do you belong to a Landlords association?

At a minimum you are going to need to budget 3 months mortgage in hand to prevent getting in mortgage arrears. Assuming that his nibs coughs up a £1 to bring it under 2 months when you issue the S8 notice. 

Yes. It's a BTL mortgage. Still, I need to cover all the mortgage payments myself if my tenant doesn't pay 

I don't belong to any landlords association. Is this the one you're talking about? 

https://www.nrla.org.uk

Maybe I should join one of these associations now... :')

So... if the tenant does pays £1 to bring it under 2 months, I need to issue the S8 notice all over again after one month, am I right?   

Yes. And then all he has to do is wait until the court date is due, pay it down to £1 less than 2 months and your S8 becomes invalid again. Rinse and repeat. If he wants, he can remain in 2 months arrears for the duration of the tenancy.
It's not enough to think that the tenancy is regularised. You need to know. It's you that is legally responsible, because you are the LL-not the agent. The fine for non-supply of a GSC is potentially unlimited, and a criminal offence. 
On the bright side, I doubt that this tenant is engaging in home horticulture. If he is, he wouldn't be drawing attention to himself by getting into arrears.
What sort of upfront fees amount to the entire first 5 months rental income?! Please don't tell us you are also locked into a 3 year management contract with this LA?
Willingness to pay above market rent and wanting a quick move-in date and not previously on the ER should have been a red light to you and the agent.