What charges can be counted as rent?

by Readers Question

3 years ago

What charges can be counted as rent?

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What charges can be counted as rent?

My occupancy agreements impose standard charges for things like rent arrears letters, or anti-social behaviour letters, or lock changes due to tenant damage, etc.

These charges are added to the resident’s rent account, and this is clearly stated and agreed to in the occupancy agreements themselves (which of course the resident signs). Thus, a resident may build up “rent arrears” consisting mainly of charges for damage and/or admin due to their behaviour.

When it comes to issuing court proceedings for possession, I include these charges as “rent due”, and this has never been challenged, but is this correct? If not, then how should such charges be shown, e.g. when doing a Possession Claims Online application?

Many thanks

Robertrent



Comments

Michael Barnes

3 years ago

I too would like to know.

I have a clause that 'all monies owed are recoverable as rent' (taken from the "Which? guide to renting and letting") which I have taken to mean that I can charge interest for late payment. I had never considered that it could also be used in support of a S8 claim.

Robert Mellors

3 years ago

Reply to the comment left by "Michael Barnes" at "27/02/2015 - 14:58":

I use these charges as part of the rent due, so if a tenant smashes a window on 1st January, then the cost of replacing this is added to the rent due for that week (or at the time I get the quote, or the date the repair is carried out). Likewise, arrears of service charges (e.g. for utility bills in HMOs) are also included as part of the total rent due, and is then put towards the figures used in support of possession claims (e.g. to meet the 8 weeks/2 months criteria for mandatory ground 8 claims).

I cannot find any court rules on this, but the Housing Benefit guidance refers to rent being any payments due in respect of the occupation or use of the property, so as the charges are clearly stated (and agreed) in the occupancy agreement and are part of the terms and conditions of occupancy, then to my mind they fall within this definition of "rent".

Ian Ringrose

3 years ago

Another option maybe just to say that, any money received to first be used as payment for charges, with whatever is remaining being used as payment for rent.

Romain Garcin

3 years ago

Rent is "Money or other consideration paid by a tenant to a landlord in exchange for the exclusive use and enjoyment of land, a building or a part of a building" (Bryne's Law Dictionary).
Certainly, the cost of any damages is not rent, and arguably other charges are not either.

Robert Mellors

3 years ago

Reply to the comment left by "Ian Ringrose" at "27/02/2015 - 18:37":

That's a good option, I may write that into my occupancy agreements. But, if it is Housing Benefit then that is paid as rent, so if it is used for another purpose then would that be acceptable (unless the other charges can be classed as rent)?

Robert Mellors

3 years ago

Reply to the comment left by "Romain " at "27/02/2015 - 18:41":

The dictionary is surely either wrong, or incomplete in it's definition, because for example rent can be for a licence occupation, i.e. where there is no exclusive possession.

The Housing Benefit regulations specifically say that "rent" can include some service charges, and indeed the contractual rent figure used as the basis for a Housing Benefit calculation is the rent including the service charges. But, it could be wider than that, because it also says about any charges in relation to the use or occupation of, so interpreting it widely, these charges could perhaps include admin fees and damage charges, so long as it it clearly stated in the agreement that these will be due as rent??? Unless anyone is aware of legislation or caselaw that expressly excludes this possibility???

Romain Garcin

3 years ago

Well, Housing Benefit is intended as helping people pay for their accommodation so it's reasonable to include service charges in computations, but that's not relevant.

In any case, damages and admin fees are not rent and, I'm pretty sure, will not be taken into account in possession proceedings.

There may be ways of "reserving as rent" some service charges, etc. (as mentioned by Michael) but I'm not familiar with these. It seems to be a common issue in commercial leases, and apparently it must be explicit in the lease. Perhaps someone with such knowledge will comment.

Robert Mellors

3 years ago

On a slightly different note, but still connected to the original posting........

What costs can be claimed at the court hearing for possession (s8 grounds)? I know we can ask for the cost of the court application fee (currently £250) to be added to the judgment, but I believe that an amount for solicitors fees can also be claimed? If no solicitor is used, and the landlord represent's himself, can a sum be added for this, e.g. a court hearing attendance fee (as landlord has to spend time and money bringing the case to court, not just the court application fee, and may be losing earnings or incurring other costs as a result of his attendance at court). - Does anyone have any ideas or guidance on this?

money manager

3 years ago

Reply to the comment left by "Robert Mellors" at "28/03/2015 - 13:32":

No, but it may depend on the lease. See http://www.lease-advice.org/publications/documents/document.asp?item=18#57


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