Rent debt recovery loan agreement?

by Readers Question

16:09 PM, 9th January 2017
About 2 years ago

Rent debt recovery loan agreement?

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Rent debt recovery loan agreement?

My tenant has agreed to leave but owes £4500 in rent arrears. loan

He has also agreed to pay off the debt in monthly installments.

I want to formalise this is in an agreement,is there a procedure to follow for this?

Does anyone have an example agreement I could use please?

Karuna



Comments

Gary Dully

18:02 PM, 9th January 2017
About 2 years ago

You don't need another document, you have a legal tenancy agreement.

Do you have a consumer credit license?

What will you call your new loan business and product ?

The dodgy tenant loan?

Can I borrow a couple of grand and promise to pay you back monthly as well?

This just sounds like another scam.

Why doesn't your tenant obtain another loan from a bona fide bank to clear their arrears and pay them back instead.

Just issue a summons for the arrears, obtain a judgement and get it enforced.

Get possession of your property back as your top priority and come back to this idiot of a tenant within the next 6 years and move on.

Jay James

19:39 PM, 9th January 2017
About 2 years ago

I doubt you will get back all of the £4500.
Just get rid of them asap with legally binding paperwork then move on.
Sue them only after they have formally surrendered the property.
If you do so before they leave, they could dig in and stay put.

Karuna Sivajoti

11:30 AM, 10th January 2017
About 2 years ago

Thank you Gary and Jay for your comments.
Just to be clear,my tenant is leaving on Friday and has agreed to repay in monthly payments to clear his rent arrears. I hope I won't need to take legal action but will if he defaults on our agreement. Unfortunately he is not in a position to get a bank loan to pay me off.
So,what I'm looking for is a suitable agreement to use,does anyone have one please?

Don Holmes

12:17 PM, 10th January 2017
About 2 years ago

Hi Karuna
There unfortunately isen't such a document available without getting a solicitor to drew up such a loan agreement after which, bearing in mind your tenant hasten't paid his monthly instalments already so why would he again?
The best advise as above is get rid and then get a court order via small claims court which would be the best,quickest and strongest "possibility " to have in stick to the deal? At least with this order you could go for some attachments of earnings and or benefits. After 30 years as a LL I must agree with the above I very much doubt he will stick to any agreement to pay the debt, let's hope he proves us experienced sceptics wrong
Good Luck

Karuna Sivajoti

12:43 PM, 10th January 2017
About 2 years ago

Hi Don,
Thank you for your response.
I'm probably a soft touch and maybe being a bit naive but want to give the guy a chance to repay. Would I still be able to get a court order via small claims court if he stops paying and defaults on our agreement.?

Jay James

19:00 PM, 10th January 2017
About 2 years ago

As said earlier in this thread, it is not a good idea to draw up an agreement.

A payment plan that is nothing but a payment plan can be done by email and is all that is needed.

However, I still think it would be better to make a county court claim the day after he vacates.

Mandy Thomson

15:25 PM, 11th January 2017
About 2 years ago

Hi Karuna

The advice others have given you is correct, and I also agree with Gary's point about needing a consumer credit licence (as this is a "loan" to your consumer, not a friend or family member). I'd go along with Jay's suggestion - do it by email, but tell him you will prosecute if he doesn't stick to the plan. The emails will provide sufficient evidence for the small claims court. I would also tell him that if he should disappear, you will employ a tracing company to find him. These traces are usually very effective.

Karuna Sivajoti

17:14 PM, 11th January 2017
About 2 years ago

Hi Mandy,
Thank you for your response.
In view of all the comments,which seem to suggest that an agreement is not appropriate,I think I will deal with it via email once the tenant vacates on Friday. Move to legal proceedings should he not keep up with payments.
Thanks again to all that commented.


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