Rent Arrears On The Slide

Rent Arrears On The Slide.

The latest figures released last week by LSL Property Services reported that the number of tenants facing serious rent arrears has fallen by nine per cent in the last 12 months.  In the latest quarter, the number of tenants more than two months in arrears stood at 62,500, compared to 71,700 for the same period last year.  There is an annual improvement of 6,500 tenants no longer facing the threat of eviction and figures also show that 98.6 per cent of tenants in the private rental sector now avoid falling in serious rental arrears.

These figures showing an overall improvement are encouraging for landlords, no landlord wants to end up with a tenant that cannot pay their rent on time.  Obviously, genuine circumstances can arise during the course of a tenancy; a tenant may lose their job, a couple could split up, personal incidents occur, the cost of living and associated bills increase, yet wages  may not.  A landlord cannot predict these things happening during a tenancy, but if a tenant does slip into arrears, communication with the tenant early on is crucial so that a payment plan can be worked out, or if necessary, a tenant can make an application for housing benefit.

We have far too many landlords that let months pass by before they take action and serve a section 8 rent arrears notice.  It makes it much harder to collect the rent, bearing in mind it can take up to five months to evict a tenant from serving notice to bailiff eviction stage.

Last week, I spoke to one landlord who instructed us to act.  His tenant had racked up thirteen months’ rent arrears by the time he had decided to call us!

Most tenants are genuine and will tell the landlord what the problem is.  But some tenants will bury their heads in the sand and ignore communication with the landlord in order to stay put until evicted.  This can cause landlords huge financial distress and even force them into mortgage arrears with their bank.  We have acted for some landlords that have decided they have had enough of being a landlord and when they finally get vacant possession, sell the property and exit the Private Rental Sector.  This has been particularly prevalent this year, as more and more landlords have seen the rise in value of their property.

We have experienced a dramatic increase of section 21 instructions this year, where landlords will use the accelerated possession procedure (no hearing) to obtain a possession order, even if they are owed rent arrears.   Many would rather go under this simpler procedure of section 21, rather than section 8 which involved pursuing the case through the courts with a hearing, as they want to avoid possible complications and delays.  In fact, we recently carried out a survey with our landlords which had served section 21 notices and 28% had tenants in arrears.

Precise Treatment Reduces Pain

Detail needs experts. Expert time is worth it when it saves you a costly mistake. Main objective: Get the property back. Best action: Very precise treatment.

Serving a notice is actually the most important part of the possession process.

It isn’t complicated but one tiny error can cause dreadful problems.

That’s why we say, don’t DIY and don’t use internet amateurs. It’s not worth it.

1. Compliance Errors
If the tenant doesn’t leave at Step1, the notice had better be valid. Because then it has to go to court. Any little error can get a case thrown out. And you have to start all over again.

2. Attempting Short-Cuts.
In an effort to be quick, some internet services aimed at landlords are using short-cuts around the process. But if the tenant doesn’t leave (50%) these practices can backfire at court and the case thrown out.

3. Trying to Save Pennies.
Internet services have mushroomed and landlords can expect to get what they pay for. To get the process done PROPERLY it takes a certain amount of time for an expert to look over a file and be accurate. Our fees cover that expert time.

Chasing courts for dates, arranging advocates and preparing court papers is time consuming. Especially if you’ve never done it before.

Some landlord and agents have served notices themselves. They believed they were saving a few pounds but it often ended up costing them more.

If you lose a claim, the court can order you to pay the tenant’s defence cost, which can run to hundreds or thousands of pounds.

Our in-house Solicitors are there to get your property back as fast as they can. And we protect landlords and agents from themselves.

As experts, we know that in the rush to get things done, errors can happen. And those errors can can come back later to mess up your case – and the whole process has to start again.

You can speed things up – give us accurate information quickly. Help us to help you.

There are services on the web who will prepare papers BUT they get you to pay the court-fee separately and get you to sign the court papers – so in fact they don’t represent you!

If your notice (at Step1) wasn’t drafted or served correctly you risk wasting your court fees and losing a whole lot of time because of a small error.

We won’t let your case anywhere near a court until we have checked every little detail. To make sure you don’t waste time or money, at Step-2 we first only charge part of the fee.

If your notice is fine, then you just pay the balance of the fee and we issue the claim. If there is a problem with your notice or paperwork, we will advise you what to do next.

Courts take the view that possession proceedings can make someone homeless. So they are very careful. If there’s any error in the notice, they throw the case out. It’s the process. Get it right or lose.

If the notice is invalid, you have to start all over again. The weeks or months you’ve waited are wasted. If there were rent arrears, there are now more.

If there weren’t rent arrears, they might now start. More fees. More lost rent. And still no possession. Tenants can be alerted to making a counter-claim.

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