12:05 PM, 9th September 2021, About 2 weeks ago 5
I purchased a property with a sitting tenant. The vendor (previous landlord) set up an escrow account as insurance against rent arrears. For various reasons I decided to give the tenant the benefit of the doubt as I was aware of some issues that were in the process of being resolved. The tenant is now receiving some housing benefit, but we are almost 6 months along and they still have some arrears to pay off.
The access to the escrow account expires soon and I have decided while I can to use it to bring the rent up to date. However, I am advised by my managing agent that this will reset the clock in terms of the amount of arrears required to issue a section 8.
A colleague has advised me that using the escrow account may not equate to the tenant paying their arrears, as the money is not theirs. In other words, the tenant will still technically owe the outstanding rent, even though the payment from the escrow account has made up the shortfall.
I cannot find any information anywhere to confirm this, indeed I am doubtful that this is the case. I would be grateful to hear from anyone who has experience with this.
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