As the cost-of-living crisis continues, more and more tenants are unable to afford their rent and are falling into arrears. This can be financially devastating for landlords, especially if mortgage rates are biting hard.

If you are a landlord whose tenants have stopped paying their rent, what can you do? Sarah Guise, a Legal Assistant in the Disputes team at WBW Solicitors in Torquay, reports.

Why might your tenant be in arrears?

Aside from the cost-of-living crisis making rent less affordable for many people, there are a number of reasons why your tenant might be behind with their rent payment. Aside from just not wanting to pay, these could include:

  • physical injury, illness, or loss of mental capacity;
  • job loss or work reduction;
  • delays with their salaries or benefits;
  • problems with their bank; or
  • being unhappy with the condition of the property.

Talk to your tenant

Your first step, if your tenant falls into arrears, is to talk to them as soon as possible to find out why they are late with their payments. Let them know how much is outstanding, and ask them to pay what they owe. You may need to agree to carry out repairs if they are withholding rent due to the poor condition of the property.

Be pragmatic about seeking a solution

It may be difficult for your tenant to repay all they owe in one lump sum, so you may want to agree a payment plan whereby they pay back a set amount weekly or monthly until the debt is settled. The Housing Mediation Service might be able to help you agree on a realistic repayment plan.

Ensure you put everything you have agreed in writing and send it to the tenant.

Tenant in receipt of benefits

If your tenant is on benefits and is struggling to pay the rent amount that their benefits do not cover, you can:

  • persuade your tenant to apply for a discretionary housing payment;
  • encourage a tenant on Universal Credit to ask for a rate rebate, which they can claim even if rates are included in the rent;
  • if your tenant is on housing benefit and is six weeks behind with their rent, or if they are on Universal Credit and are two months in arrears, you can ask for housing-related benefits to be paid directly to you; and
  • if the arrears continue, you can ask for deductions from benefits to go towards the arrears.

Eviction under section 8 of the Housing Act 1988

It may be that you would like to evict a tenant who is habitually behind with their rent. This is allowable under section 8 of the Housing Act 1988 at any point of a fixed-term tenancy, if your tenant is:

  • more than eight weeks in arrears if paying weekly or fortnightly; or
  • two months in arrears if paying monthly.
  • persistently in arrears or late in making payments

A formal notice in a prescribed form must be served on your tenant which sets out that you are intending to apply to the Court to seek an Order for Possession, ending the tenancy. The notice must be served in accordance with court rules, or any service rules set out within the tenancy agreement and consideration needs to be given in relation to the “deemed date of service” which will impact the date the notice period will end. The notice period required will depend on what ground you are seeking possession on. In relation to rent arrears under Ground 8, the notice period is 14 days’ calculated from the day after the notice is “deemed” served.

In addition, the notice requires you to set out the relevant grounds contained within the Housing Act 1988 (as amended) in which you are seeking possession on, and you must give an explanation as to why each ground is being relied upon.

It is imperative the notice served is completed and served correctly to ensure it is valid. Any failings will likely result in your claim for possession being unsuccessful should the matter proceed to court.

In some cases, there are other things that may need to be taken into consideration to ensure the validity of the notice and so it might be prudent to seek legal advice in the first instance so as not to lose time or incur unnecessary costs if your claim is unlikely to be successful thus leaving you to start the whole process again from scratch incurring further costs.

After a valid notice has been served, should your tenant fail to leave the property or remedy the breach by the specified date set out in the notice or in relation to notice served in respect of rent arrears grounds, the tenant does not pay the amount owed, you will need to apply to the court for a possession order. If an outright possession order is granted, your tenant will usually be ordered by the Court to leave 14 days after the order is made. If they do not, you can apply for a warrant of eviction, allowing you to send bailiffs to forcibly evict your tenant.

It may be that the court will grant a suspended possession order which will allow your tenants to remain in the property as long as they repay all the arrears and keep paying their rent on time. If they do not stick to the agreement, you are entitled to apply for a warrant of eviction.

Eviction under section 21 of the Housing Act 1988

If your tenant’s fixed-term tenancy is drawing to a close or there is a break clause in the tenancy agreement which allows you to bring the tenancy to an early end, you may want to evict your tenant under section 21 of the Housing Act 1988.

This allows you to evict your tenant without giving any reason and thus saves you the work of providing evidence of arrears to the court, as required for section 8 evictions. However, there is various legislation that must be adhered to to enable a landlord to serve a valid Section 21 Notice, including using the relevant prescribed notice form. Again, it might be prudent to seek legal advice first to check your ability to serve such a notice to ensure its validity.

The notice period you must give your tenant for a Section 21 Notice is at least two months from the “deemed” date of service. This should be served at least two months before the tenancy is due to end or before the break clause can be triggered. If not done correctly, or if the tenant has not been provided with correct paperwork beforehand the court is unlikely to grant a possession order.

Recovering overdue rent

If your tenant moves out and rent is still outstanding, you can:

  • propose deducting the amount owed from the deposit;
  • claw back the money owed from the tenant’s guarantor; or
  • take your tenant to court to recover the debt.

How we can help

The eviction process can be stressful for both you and your tenant and the consequences for getting it wrong can be both costly and time-consuming. If you want to evict a tenant for rent arrears, it is important to seek expert legal advice.

Our team of specialists can help you decide which eviction procedure to pursue, ensure all the required paperwork is filled out correctly and served on the tenant in the proper manner, represent you in court if a possession order or warrant for eviction is required, and advise you on the best way to recover any rent that is still outstanding when your tenant moves out.

Note: On 17 May 2023, the former Government announced the new Renters’ Reform Bill will ban section 21 no-fault evictions. However, the change in Government meant this Bill was not approved in time and the current Labour Government is in the process of drafting their own similar Bill named the Renter’s Rights Bill which is not yet in force.

For further information, please contact Sarah Guise in the Dispute Resolution team on 01803 382812 or email SarahGuise@wbw.co.uk.

WBW Solicitors has offices in Axminster, Bovey Tracey, Brixham, Chard, Exeter, Exmouth, Honiton, Launceston, Newton Abbot, Paignton, Seaton, Sidmouth, and Torquay.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.