Tenant With 2 Months Arrears – “Do what you like”!

by Readers Question

10 months ago

Tenant With 2 Months Arrears – “Do what you like”!

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Tenant With 2 Months Arrears – “Do what you like”!

Hi guys, I am in a situation where tenant has defaulted 2 months in a row as such she is in arrears for 2 months accordingly. She has been my tenant since mid August and she did not pay last month’s rent as she suggested that she would pay it in January both months combined. this way out

The rent was due on Monday, she stated that, she would pay at 9am when bank opens. I contacted her at 12pm to state that the rent has not come in. She responded “I would pay ASAP”. I asked when what time? She responded, when I am ready”. I said, you still need to tell me when she repeated when I am ready”

Finally she stated, I am fed up with you and cannot deal with you just serve us notice via email”. I stated that, you would still need to clear arrears to which she responded she has not got any arrears. I responded she does to which she responded “Do what you like”.

I have today served her Section 8 and 21 Notice together. Section 8 does not expire until 4 Feb 2017 and Section 21 does not expire until Mid April 2017. I am exercising my 6 months break clause although tenancy is set up for a year. I need to check with your guys if wording of break clause is OK.

The wording of break clause is:

Early Termination

If it is agreed between the Parties that either may terminate this Agreement as follows:

– By the Landlord giving to the Tenant at least two months written notice, such notice to expire on the last day of the rental period;

– By the Tenant giving to the Landlord at least one month written notice, such notice to expire on the last day of the rental period.

Under such clause, notice cannot take effect earlier than the last day of six month of the tenancy.

My questions are, what route is better Section 8 or 21 in my circumstances? Can she claim that she has paid rent to me in Cash and deny any arrears? in which case Section 21 may be better route however wait is longer! I am aware that, I can not run both Section 8 and Section 21 Concurrently. What other options I have to evict her?

Is my early break clause within tenancy appropriately worded?

Any advice will be greatly appreciated.

Kind regards
Simon

Comments

Gary Nock

10 months ago

Hi Simon,

You cannot end a tenancy with a Section 21 within the fixed term. And for Section 21 to be valid you will need to prove you have served all the associated regulatory compliance that goes with it. Deposit Protection Prescribed Information, EPC, gas cert, How To Rent Booklet. The break clause is immaterial really. Rely on the Section 8. Non - payment of rent. But be aware that if they pay up before the court hearing so its less than one month then the Judge will not award possession.

Simon Hall

10 months ago

Reply to the comment left by "Gary Nock" at "19/01/2017 - 14:03":

Thanks Gary! That's interesting as I have spoken to lady who is a solicitor who served notices on my behalf stated that I can exercise my rights for early termination break clause. As in tenancy it states Early termination not earlier than 6 months but by the time it expires it would have been six months.

No deposit was taken and it is confirmed on Tenancy that she has received EPC, Gas Safety and Renting Guide leaflet.

Gary Nock

10 months ago

Hi Simon. I would not argue with a qualified solicitor who should know about such matters. But....a tenancy agreement is subservient to the Deregulation Act 2015 which governs Section 21 processes along with other landlord and tenant law. Romain who posts on here is pretty knowlegeable on these matters and hopefully he may see it and post his opinion. I would rather rely on statute rather than contract ( AST ) law.

Simon Hall

10 months ago

Thanks Gary. I hope Romain reads it and gives his opinion.

I am surprised Neil Patterson has not commented, usually he makes first initial brief response!

Chris Clare

10 months ago

Break clauses are more common in commercial leases where there is not the Assured Shorthold Tenancy regulations to be concerned about.

My understanding is, you cannot have a break clause within the prescribed term of the tenancy but I am more than happy to be proved wrong.

If the tenant is with you a little longer and more persistently neglects the rent you can then serve a Ground 11 which is persistent none payment and this can be used even if the tenant gets the rent paid before the court hearing.

Hopefully it won't come to this but it is worth remembering.

Dr Rosalind Beck

10 months ago

Hi Simon
Re the point about her possibly claiming she paid you in cash, I wouldn't worry about that as the judge would only believe it if she could prove it, which she obviously can't.

Sorry you have to go through this. Been there and got the t-shirt - when they say they'll pay double the next month, but they couldn't 'afford' to pay the first month. Obviously she spent the money on Christmas. It's a horrible feeling when these tenants turn 'rogue' and behave like cheating you out of the rent money is fine and that it's not their 'responsibility.' It's a bit like a bully in the playground has stolen your dinner money, is laughing at you, and no-one is on your side. You can feel a bit of a mug, but that is not the case at all. They are little shits and you are fine. I am sure many business people feel the same - when they supply goods and the recipient then won't pay for the goods.

I have a tenant who paid as regularly as clockwork, but stopped paying a few months ago and he went from being what I thought of as a really nice tenant to a nasty bit of work, and the kind of loose cannon who is behaving like he could burn the house down. It's not pretty. And court fees have gone up about three times to £325, so when they say they are leaving in a week or two it's tempting to hang on and see - but they can then buy themselves even more time.

The best of luck with this. All of us who have been in this game for a while can feel your pain.

Luke P

10 months ago

Reply to the comment left by "Dr Rosalind Beck" at "20/01/2017 - 09:38":

Whilst I am sure I will maintain my regular attendance at Court (usually it's the homeowner guarantor rather than the tenant themselves), I am looking into alternative, more immediate remedies.

No doubt it would require jumping through hoops (FCA licence perhaps...), but I wondered about taking a logbook as an additional form of security. Or anything that could be removed fairly immediately. Just like would be the case with a defaulted logbook loan repayment, their car becomes mine. Or perhaps a swipe of the guarantors credit card...just like a hotel would refer back to should the room be trashed.

Sorry to hijack, but wondered if anyone else had any ideas or comments on the above strategies.

I haven't taken deposits for over ten years (just a homeowner guarantor) and I was labelled a maverick back then, but now it's common practice.

Romain Garcin

10 months ago

There is no issue with having a break clause.

It has previously been held that a s.21 notice could be used to exercise the right to break under a break clause as long as the notice complies with the conditions of the break clause.
However, the best way to avoid arguments is, I think, to give notice under the break clause then to give notice under s.21.

Gary Nock

10 months ago

Luke I know you are an experienced landlord from your posts. I don't know your portfolio size but I rent insure all my properties and those of my landlords for £100 per year per property. Okay the tenants and I have to jump through the referencing hoops but once passed the insurer takes it on. Don't want to mention them here as obviously it's free advertising for them. But as long as you read all the policy "get outs" and devise a checklist so every tenancy complies then it's fine. You have 42 days to submit a claim or if you want it paid monthly then put a claim in within 14 days and its paid in arrears. And then the insurer appoints a solicitor / barrister who goes to court with you and does all that needs to be done . I know you are quite capable of doing all this yourself as am I but the time and money it takes when one goes rogue is far in excess of the £100 per property I pay on my block policy. For those that can't do it and have to pay solicitors then it's a no brainer.

Luke P

10 months ago

Reply to the comment left by "Gary Nock" at "20/01/2017 - 11:48":

Thanks Gary,

The problem we have here in poor Grimsby/Cleethorpes/Immingham is that none of my 'customers' would pass the credit/referencing checks that the RGI require.

Short, sharp justice is what works here.

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