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Facing Rent Arrears as a Tenant

There is perhaps no greater test of the dynamic between a landlord and their tenants that when experiencing rent arrears. Above all each party of the rental agreement should be transparent and fair, because whilst it would be easy to condemn the residents of the property for failing to meet their obligation to pay rent, the instances where this is a malicious action or deliberate choice are few and far between. Not only that but it is also in the best interest of the landlord to ensure their tenants are able to recover from their financial troubles and get back on their feet, giving the landlord a stable income, reliable tenancy all whilst avoiding a lengthy and often bitter eviction dispute.  

It is essential to note that regardless of the circumstance, even when the tenant believes the landlord is not adhering to their obligations outlines within the terms of the tenancy agreement, withhold due rental payments. This is nothing more than a short signed retaliatory measured, with some tenants falsely believing this is an acceptable action in instances where the landlord becomes uncooperative with issues in the tenancy or in most cases, neglects to attend to the maintenance and general upkeep of the rental property. If a tenant were to stop paying their rent, this in itself would be a breach of the tenancy agreement and regardless of the circumstance will empower the landlord to begin possession proceedings.

It is often advised that if a tenant believes they are unable to pay their rent they should first consult their landlord or letting agency directly. Of course, arrears is a contentious issue but all concerned will be far better off for this transparency and addressing these debts before they spiral out of control is often the best way to remedy the situation for both the tenant and the landlord. As stated the landlord will often work with their residents to ensure they are able to remain in the rental. To this end a repayment plan or temporary period of reduced rent is often put in place, allowing the tenant to settle the outstanding rental payments at a later date whilst also offering the landlord a dependable income.

When negotiating a repayment plan with your landlord it is essential to only commit to a realistic budget, accounting for your unavoidable living expenses, whilst making paying the rent a priority. If an unrealistic repayment plan is established this could only serve to expedite the issue, leaving the tenant struggling to keep up with the repayments. Once this is agreed a document should be curated clearly stating the duration over which the tenant will pay a reduced amount of rent, alongside how much they will be expected to repay in each instalment, accompanied by a signature from both the landlord and tenant.

With this being said, it is the unfortunately reality that a repayment plan is not always possible to negotiate and in such instance s the tenant will need to turn elsewhere for support. Tenants at risk of facing rent arrears should check if they are able to claim benefit payments to help them meet their rental obligations. These payments can be made directly to the landlord’s account ensuring that the debt is repaid whilst supporting the tenant’s income, often referred to as a third party deduction.

Can You Be Evicted for Rent Arrears?

It is highly likely that is you begin to accumulate an excessive amount of rent arrears that the landlord will begin to explore their options to begin the process of regaining possession of the rental property. This will naturally involve evicting the tenant from the premises after first being served a form of notice, making clear the intent of the landlord and the time frame in which the tenant has to prepare to leave or defend their case. Once this notice period has expired the owner of the rental property is then able to seek a “possession order” from the courts, legally compelling the occupants of the rental to find accommodation elsewhere and vacate the property. However, if after the landlord gains this possession order the tenant’s still prove to be reluctant in leaving the property they are able to have the eviction enforced through bailiffs after being granted a “warrant of eviction” by the courts.

When pursuing rent arrears through the courts the landlord will be granted with one of three possible possession orders; an outright, suspended or postponed possession order, all bringing with them varying conditions and stipulations.  

With this being said, if the rent arrears have been accumulated close to the end of the rental agreement’s fixed term, it is likely that the landlord may serve you with a section 21 notice. This is largely to avoid a complicated and lengthy repossession process making the section 21 notice somewhat favoured by landlords. The section 21 notice is simply a statement of intent that once the fixed period of the tenancy draws to a close the landlord does not wish to renew the tenancy agreement and instead would like to reclaim possession of the rental. Because of this on face value the tenant is seen to have no wrongdoing and therefore the eviction does not need to be justified by the landlord, earning the section 21 notice the informal title of the “no fault eviction.” 

However, if the amount of rent arrears you have accumulated is a significant amount, typically two or months’ worth of missed payments, the landlord may choose to serve what is called a section 8 notice. This notice is also far more viable than a section 21 notice as a landlord will not have to wait until the end of the fixed term to see the tenant removed from the property and bring an end to the missing rental payments. But, unlike a section 21 notice, when serving a resident with a section 8 notice a landlord must justify why they have done so, siting specific grounds for the eviction that regard how the tenant has been found in breach of the tenancy agreement. Depending on how much arrears the occupant of the rental property has accumulated the landlord may be empowered to site multiple grounds with their section 8 notice, leaving the tenant to defend the claim of arrears on multiple fronts and making the case for eviction more compelling to the courts.

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Paying Rent in Advance

In an effort to protect themselves from tenants that may present a risk of rent arrears it is becoming increasingly common for landlords to request a certain amount of rent is paid in advance before the tenant moves into the rental property. This method of financial safeguarding is most commonly implemented with aspiring tenants that show a blemished financial history or credit score, or those that are unable to source a guarantor. As can be expected this somewhat mitigates the risk of initial rental arrears as the landlord will receive rental payments upfront, whilst also leaving the tenant with slightly more expendable income across this period. Whilst there are of course those that appose much moves by rental property owners, the argument has been made that requesting a tenant pay rent in advance could make the private rental sector more accessible, with tenants that would otherwise be turned down for rental opportunities being able to rent out their future home providing they establish a compromise with their landlord.  

Typically when requesting that a prospective tenant pays rent in advance, the amount being paid before moving in is no more than a single months’ rent. However, in the absence of any legal beaneries being established for what a tenant can be asked to pay in advance it is not uncommon for some rental property owners to ask for as much as six month rent in advance. With recent concerns surround the stability of tenants income within the private rental sector being highlighted, the amount of arrears landlords are facing has surged threefold to approximately 800,000 renters since the outbreak of the COVID pandemic.

This is of course an impractical solution for landlords in this current financial climate, with hundreds of thousands of household scrambling to maintain a regular income and consistent employment, requiring these renters to hand over as much as a quarter of their annual earnings before moving into the property is simply unachievable for the vast majority. Not to mention that this would also be paid alongside the holding deposit and tenancy deposit after signing the tenancy agreement, presenting a financial barrier to renting that could be the highest the sector has seen in recent times. Whilst we understand that landlords will need to be dependent on the consistency of their rental income, especially when government research has revealed almost half of UK landlords are exclusively reliant on a single property for their rental income, making them incredibly susceptible to the effects of rent arrears. However, some have argued that requesting rent in advance is not addressing the problem, and if anything making it far more difficult for renters to find their next home, while landlord will inevitably face longer void periods because of these stringent, if somewhat heavy handed requirements.

Tenancy Deposit Deductions

Whilst the act of landlord reducing the amount of the tenancy deposit that will be returned to the tenant is more commonly associated with the associated costs of dealing with repairs, maintenance and replacing furnishings found within the property, it is also possible for landlords to recuperate any missing rental payments through these deductions.

However, with this being said to the dismay of many rental property owners, the pursuit of outstanding rental payments through a deduction from the tenancy deposit in most cases is not that fruitful when the amount of arrears is more significant. This is because with the introduction of the tenant fees act 2019, a limit was placed on the amount a rental property owner is bale to request their tenant’s pay for their tenancy deposit. The threshold established by the act meant that the amount a tenant is required to pay for their security deposit is largely dictated by the annual rental fee the landlord charges for the property. With this in mind is the amount the tenant pays in rent each year is up to £50,000 the landlord is only entitled to request a maximum of five weeks rent for the deposit. However, if the annual rental charge is over this amount rental property owners are able to ask for up to six weeks rent for the tenancy deposit.

This threshold has seriously impended a landlord’s ability to recuperate rent arrears from their tenants as using deductions from the amount taken from the tenant would only be viable if the accumulated arrears are no more than a single month’s worth of rent. Whilst it is not common practice by any means, it is not unheard of for tenants to intentionally rely on their deposit to cover their final rental payment, this is of course discouraged as not only can the dispute process be avoided, but this will also be a significant blemish on the next reference provided to your new landlord; something property owners are dependent on when evaluating if they should let out their property to an aspiring tenant.

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