Tenancy in arrears - Advice needed

propertyrental

* many of the issues being raised above apply to the use of a S21. As the fixed term is 3 years (with no Break Clause?) S21 is out of the question.
* Yes the agent can serve a S8, but cannot represent you if it then goes the next step to court. Only you, someone you appoint with POA, or a solicitor, can go to court and apply for possession.
* A S8 G8 will fail unless the T is 2+ months in arrears both i) on date S8 is served and ii) court date. So yes, if T pays rent down to £1 below 2months the S8 G8 will fail.
* However you could also serve a S8 G10 or 11 though as I said these are discretionary so judge may, or may not, grant possession. Probably not since " the rent was paid on time until this month.". The court would want to see evidence of greater failures by the T than that.

macman

I'm still baffled by the 3 year AST-has anyone else come across one as long as this before 'suggested by the agent' as the best deal?
OP, are you sure there is not a break clause you can exercise, at maybe 6 months?
Otherwise you are down to the sole option of using an S8, once the arrears reach 2 months. 

anselld

macman said:

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.

The s8 does not become invalid in this scenario.  Yes, ground 8 is invalid with less than two months arears, but grounds 10 and 11 remain valid.  They are discretionary grounds but any discretion is not going to extend to remaining 2 months -£1 late for the duration of a 3 month tenancy.  There will at least be a conditional order.

LegallyLandlord

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... :')

Definitely join the NRLA. It’s money well spent. They have a lot of resources and a telephone helpline for landlords. If you use this referral code, you’ll get £15 off the membership fee: UYN-702.

I do feel sorry for you. Must be such a shock. I have a low opinion of letting agents due to problems I’ve had before I decided to self-manage and self-let. 

I agree with others that a 3 year fixed term without a break clause was not good advice because you can be stuck with a bad tenant having to rely on s8 and unable to use s21 (for as long as it lasts). 

If and when you extricate yourself from this tenancy, choose different agents, or do it yourself: 

https://theindependentlandlord.com/self-managing-rental-properties/

Robbo66

Just to clarify, although 2 months arears in the term generally used its not a full 2 months before serving the Sec 8. The notice can be served when the tenant is 2 rent payments is arears so can be served as soon as the second payment is overdue so after 1 month and a day

RAS

As above, I'd suggest you take NRLA advice and specify all the relevant S8 grounds re persistent arrears. 

theartfullodger

Robbo66 said:

Just to clarify, although 2 months arears in the term generally used its not a full 2 months before serving the Sec 8. The notice can be served when the tenant is 2 rent payments is arears so can be served as soon as the second payment is overdue so after 1 month and a day

For the avoidance of doubt an s8g10 notice of arrears may be validly be served if only 1p is underpaid for only 1 day.  Unlikely to succeed in court but a very cheap way of sending a message. 

=see....

https://www.legislation.gov.uk/ukpga/1988/50/schedule/2/part/II/crossheading/ground-10

aimee_coop

macman said:

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.

It's mainly the letting fee which takes up 8% (+VAT) of the all the rents of the 3-year tenancy and they collect it at the beginning.
And yes...it's a 3 year contact with the LA

It did wonder why he wanted to move in so quickly. I should have trusted my instinct... sigh...
I have gone through the agreement, I don't think there is a break-clause but I will ask my LA

aimee_coop

anselld said:

macman said:

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.

The s8 does not become invalid in this scenario.  Yes, ground 8 is invalid with less than two months arears, but grounds 10 and 11 remain valid.  They are discretionary grounds but any discretion is not going to extend to remaining 2 months -£1 late for the duration of a 3 month tenancy.  There will at least be a conditional order.

Thanks for clarifying this.
I hope it won't come to that

aimee_coop

Robbo66 said:

Just to clarify, although 2 months arears in the term generally used its not a full 2 months before serving the Sec 8. The notice can be served when the tenant is 2 rent payments is arears so can be served as soon as the second payment is overdue so after 1 month and a day

Wow!
That can speed things up for one whole month.