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Collecting Unpaid Arrears

Alan Hamblett, Partner at Corclaim, comments

In an earlier article, I talked about the options that are available to landlords of commercial property for collecting unpaid arrears whilst maintaining a reputation for treating tenants fairly. How does that apply to residential property though?

Essentially, the remedies are similar, but the protection afforded to residential tenants by law is much wider. The Labour party promised in its election manifesto that it would “put bad landlords out of business” and would introduce rent controls and a new tenants’ charter. That did not happen but the law remains a minefield.
The first point to make is that a direct conversation is usually the best way to resolve any short-term financial difficulties. A reasonable landlord and a reasonable tenant ought to be able to agree a solution without having to resort to the courts. If a tenant refuses to cooperate though, further action may be required.

The First Tier Tribunal deals with disputes between landlords and tenants in relation to rent and service charges. This can be expensive though and costs are not generally recoverable from the other party.

If there is no genuine dispute but a tenant is simply refusing to pay what is owed, proceedings can be issued in the County Court - either seeking judgement for the arrears or an order for possession (or both). It is not possible to evict a residential tenant without a court order and possession cannot be gained simply by changing the locks, as with commercial property, unless the landlord can prove that the premises have been abandoned - and this is not as easy as it might sound. Using force to gain re-entry is a criminal offence and may result in a banning order and a listing on the rogue landlords database.

A reasonable landlord will obviously observe its responsibilities for gas safety, electrical safety and fire safety including annual safety checks, installation of smoke alarms, carbon monoxide alarms, fire alarms and extinguishers (particularly in a house of multiple occupation). A reasonable landlord will also ensure that any deposit is paid into a government-approved Tenancy Deposit Protection Scheme for any assured shorthold tenancy that began after April 2007. If there is any dispute at the end of the tenancy, the deposit will be protected in the scheme until the dispute has been resolved.

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