Call of the month: Managing rent arrears before serving a notice

This month we were able to assist one of our members who had some difficulties with one of their tenants being able to pay rent.

What was the situation

The tenant has been renting from the landlord for a while now and has had some sporadic problems but has always resolved them in the past. More recently however, this has taken longer to resolve and unfortunately now they have been unable to pay off the arrears.

Our landlord was wanting our advice on how to proceed from here and what actions our expert support team would recommend they do.

The tenancy was in a fixed term for the next 10 months, so a Section 21 notice was not available. This left Section 8 as the only possession notice available.

The tenant had previous problems paying rent and had built up slightly less than two months of rent arrears. This meant the arrears were large enough to serve a Section 8 notice for rent arrears, but only using the discretionary possession grounds (10 and 11).

The discretionary grounds allow a judge to decide whether it’s fair to evict someone, meaning that landlords won’t have any certainty they will be granted possession if they apply to court.

For the landlord to have confidence about regaining possession it would be better to wait until the tenant had built up at least two months of arrears as this would allow the landlord to use a mandatory possession ground (Ground 8) meaning the courts must grant possession.

What was the advice

With that in mind, our advice was to try and work with the tenant to pay off the arrears but prepare to serve notice if the arrears increase further.

Generally it will be better to sustain the tenancy if possible so contacting the tenant to discuss a payment plan to pay off the arrears, and find out why they are struggling to pay the rent could lead to the arrears being paid off.

If that doesn’t work, and the arrears continue to build then we advised serving a Section 8 notice when they could use the mandatory possession ground. We signposted the member to our guides on serving a section 8 notice, which includes our completion notes, and to our guide on managing rent arrears. Finally, we suggested that they call us back to discuss this in more detail if they get to the point of serving a notice as it can be daunting if you haven’t had to do so before.

We also advised them to discuss with the tenant if they are in receipt of Universal Credit. If they are then the landlord should consider applying for direct payments of the housing component of Universal Credit once the arrears built up to two months. This can be done online here.