Landlord Advice Section
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A tenancy agreement is a legally binding contract in writing that sets out the rights and responsibilities of both the landlord and tenant. It will contain various details such as the length of the agreement, the rent payable and what is and isn't allowed in the premises.
The most common agreement is an assured shorthold tenancy (AST). An Assured Shorthold Tenancy entitles the landlord to possession of his/her property after the initial agreed period, which cannot be less than six months. The landlord is therefore able to evict the tenant after the initial fixed term without a legal reason i.e. rent arrears. If this is the case and the landlord does not wish to renew the tenancy then they are obliged to give at least two months' notice using a section 21 to end the tenancy. However, if both the tenant and landlord are happy to continue with the rental agreement another tenancy agreement can be agreed and renewed for a further fixed period.
It is extremely important that the tenancy agreement is written and compiled by a professional person and must contain certain clauses that ensures you as a landlord are fully covered.
Residential Tenancy Rental Arrears
It is important that landlords take precautions as outlined below. Landlords can considerably reduce the risk of rent payment problems, if the correct procedures are followed. However, you can never eliminate the risk entirely, and sometimes financial problems go beyond the tenant’s ability to control.
It is recommended that tenants pay by Standing Order or Direct Debit. It is advised that landlords monitor bank accounts regularly to ensure that payments have been made on time and in full. It is suggested that a payment reference is placed on the standing order or any payments made to the landlord including details such as: tenants name, house number, property reference number etc.
If payments are not received, you need to be able to prove this through bank statements or a rental payment schedule.
Rent arrears need immediate action. Firstly to let the tenant/s know that you take rent arrears very seriously and secondly to take appropriate steps at an early stage to prevent the matter getting out of hand.
Landlords must quickly establish why the rent has not been paid. It is quite possible that the bank has not made the payment or the tenant has overlooked his/her account.
Most tenants, when reminded about a missed payment, will respond quickly and remedy the situation. However, if after a few days the situation still persists then you may have a more serious rent payment problem. Landlords need to act quickly in order to resolve the issue with the tenant. If the tenant has confirmed that they have financial problems or the tenant has lost his/her job it may be possible to come to some mutually acceptable arrangement. Should both the landlord and the tenant agree, we would advise to set out in writing a plan of action with timescales for payments and back payments of rent arrears. (This may include accepting a smaller rental payment with increasingly additional amounts to pay off the rental arrears over a period, or the agreement to pay a lump sum at some future date to make upthe rental arrears).
Landlords must remember not to accept the security deposit as a rental payment, this is the landlords only security in this type of situation and is also under deposit protection which can therefore not be utilised under the Deposit Protection Scheme until the end of a tenancy. Tenants in a rent arrears situation often refuse to communicate and actively avoid contact with their landlord. This makes things very difficult and often results in the inevitable -possession proceedings through the courts.
Landlords must remember to follow up all communication to the tenant with a letter and most importantly keep copies. (Putting everything in writing may be vital evidence should the matter be taken to court).
When landlords are faced with no other alternative but to begin legal action against the tenant there are then only two routes that can be applied:
The accelerated Possession Procedure (Section 21) is where normally no hearing is required and the judge can issue a possession order based on the application alone. It must be noted that this route does not include a claim for any rent arrears. We would advise in this case to issue a claim for the rent arrears owed through Small Claims procedure.
The Section 8 route involves claiming for possession under one of the seventeen grounds set out in the 1988 Housing Act. Under this particular procedure, a claim for the rent arrears owed is included.
Under the Section 8 procedure there are some grounds that will give mandatory possession when a tenant is in full two months’ rent arrears. There are other non-mandatory grounds, known as discretionary grounds, which can also be invoked, but with less certainty of the outcome.
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17 Grounds for Possession - Housing Act 1988 & 1996
The residential investment property was previously the landlords only or main home or the landlord or their spouse require it to live in as his or her main home.
The residential investment property is subject to a mortgage which was granted before the tenancy started and the lender, usually a bank or building society, wants to sell it, normally to pay off mortgage arrears.
The tenancy is for a fixed term or not more than 8 months and at some time during the 12 months before the tenancy started, the property was let for a holiday home.
The tenancy is for a fixed term of not more than 12 months and at some time during the 12 months before the tenancy started; the property was let to students by an educational establishment such as a university or college.
The residential investment property is held for use for a minister of religion and is now needed for that purpose.
The landlord intends to substantially redevelop the residential investment property and cannot do so with the tenant there. This ground cannot be used where the landlord, or someone before him or her, bought the property with an existing tenant, or where the work could be carried out without the tenant having to move. The tenants removal expenses will have to be paid.
The former tenant, who must have had a contractual periodic tenancy or statutory periodic tenancy, has died in the 12 months before possession proceedings started and there is no one living there who has a right to succeed to the tenancy.
The tenant owed at least 2 months’ rent if the tenancy is on a monthly basis or 8 weeks rent if it is on a weekly basis, both when the landlord gave notice seeking possession and at the date of the court hearing.
Suitable alternative accommodation is available for the tenant, or will be when the court order takes effect. The tenants removal expenses will have to be paid.
The tenant was behind with his or her rent both when the landlord served notice seeking possession and when he or she began court proceedings.
Even if the tenant was not behind with his or her rent when the landlord started possession proceedings, the tenant has been persistently late in paying the rent.
The tenant has broken one or more of the terms of the tenancy agreement, except the obligation to pay rent.
The condition of the property has got worse because of the behaviour of the tenant or any other person living there.
The tenant or someone living in or visiting the residential investment property:
- Has caused, or is likely to cause, a nuisance or annoyance to someone living in or visiting the locality: or
- Has been convicted or using the property, or allowing it to be used for immoral or illegal purposes, or an arrestable offence committed in the investment property or in the locality.
The condition of the furniture in the property has got worse because it has been ill treated by the tenant or any other person living there.
The tenancy was granted because the tenant was employed by the landlord, or a former landlord, but he or she is no longer employed by the landlord.
The landlord was persuaded to grant the tenancy on the basis of a false statement knowingly or recklessly made by the tenant, or a person acting at the tenants instigation.
There are many reasons why an eviction process should be initiated, for example:
- Not paying the full amount of rent
- Continuously causing damage to the property
- Any severe health hazard
- Involvement in any kind of illegal activities
- Violating any of the terms of the lease
- Unauthorised entry such as forceful entry
- Not moving out even after expiry of the tenancy