The number of private sector tenants in severe arrears is still increasing, albeit at a slower rate, rising by 1.6% in the 3rd quarter of 2012.
There are now more than 99,000 tenants in rent arrears greater than 8 weeks plus – the highest since 2008 and 15% more than last year.
Tenants in severe arrears represent 2.5% of all PRS tenancies in the UK
Although severe arrears cases climbed steadily last quarter, overall tenant arrears fell slightly in August 2012, with 9% of all rent late or unpaid, the first improvement in this measure in three months.
Despite the steady growth in severe tenant arrears so far this year, there was a slight reduction in the number of tenants who faced eviction through court order on a quarterly basis.
In the 2nd quarter of 2012, some 25,422 tenants faced eviction, a quarterly fall of 6% compared to the previous quarter. However, evictions remain 8% higher on an annual basis.
For landlords dealing with tenants in rent arrears, life can be difficult and the stress can be intolerable, but every effort must be made by the landlord to reach an amicable resolution before any legal action can be taken.
Many UK landlords will probably have to deal with this problem at some time or another, and the reality is that it may well be sooner rather than later, especially with the introduction of the new “Universal Credit” system due in October 2013.
With dispute resolution in mind, here are a few hints for landlords to try to get the tenant(s) to pay up.
- 1 – Gentle Reminder within 48 hours of the missed payment date
The tenant may have issues with their payroll department, or may have forgotten to transfer the funds, they may have a problem with their bank or had a problem with a standing order.
A phone call or polite letter should be all that’s needed at this stage, if it was a genuine mistake.
- 2 – Propose a Repayment Plan
If the tenant is struggling to meet rental payments or has been late on more than a single occasion, or are having difficulties with debt, there are professional companies like Legal 4 Landlords that can help .
- 3 – Stick To The Terms Of The Rental Agreement
Even if tenant(s) breach the terms of the tenancy agreement by not paying the rent, the landlord could still face legal proceedings if they fail to act within the law and abide by the terms of the rental agreement.
- 4 – Serve Notice For Possession
A notice of eviction. There are legal guidelines that must be observed about how long landlords must wait before such a notice can be served, usually once a tenant is more than 8 weeks in rent arrears.
There are also rules about how long your tenant has to repay the arrears, or move out. Notices for possession should be handled by tenant eviction specialists and all correspondence should be sent recorded delivery, as proof of delivery.
- 5 – Start Eviction Proceedings
There are two ways to issue proceedings:
Accelerated Possession Procedure (Section 8) which would involve a court hearing or possession under the ‘fixed date’ procedure (Section 21) whereby the landlord gives at least 2 months notice for the possession of the rental property.
Speak to Legal 4 Landlords on 0844 567 4001 to find out more about these options and take advice from the UK’s leading landlord services company.