Rent arrears, accumulated when tenants fall behind with their monthly rent can be a bane for any landlord. It is important to do the utmost to avoid arrears building up.

Prevention starts even before a tenancy is granted - with proper credit checks, sight of the prospective tenant’s or tenants’ bank accounts, and details of his, her or their employment. But even ‘good credit risks’ can sometimes move into arrears.

While landlords will wish to sympathise with the plight of good tenants whose circumstances have changed, action should be taken to make tenants aware that arrears are not acceptable and if necessary to come to some agreement for dealing with these. For example, landlords can offer to allow tenants to spread the making good of arrears over a few months on condition they provide a guarantor (assuming there is not one already in place).

But if tenants fall into arrears and are not prepared to talk about the problem, landlords have no alternative but to press ahead with collection proceedings. These should start with a series of (perhaps) three letters, sent a few days apart, each reminding the tenant in more forceful terms that the rent is overdue and what the consequences might be.

Landlords have a number of means of pressing their claims. The first is the threat, and if necessary pursuit, of possession proceedings leading to eviction. Application will have to be made to the court on what is known as ‘ground 8’ – one of the grounds for possession specified in the Housing Act 1988, see Possession. This applies if  the tenant owes at least two months’ rent (if the tenancy is on a monthly basis) or eight weeks’ rent (if it is on a weekly basis), both at the point the landlord gave notice seeking possession and at the date of the court hearing. If proved, this is a ‘mandatory ground’, meaning the court is obliged to grant possession to the landlord.

As tenancy agreements normally specify that rent is to be paid one month in advance, tenants are likely to be two months in arrears as soon as they miss two payments in a row.

Application can also be made at the same time for possession on ‘ground 10’ – that the tenant was behind with his or her rent both when the landlord served notice seeking possession and when he or she began court proceedings, and ‘ground 11’ – that even if the tenant was not behind with his or her rent when the landlord started possession proceedings, the tenant has been persistently late in paying the rent. These are ‘discretionary’ grounds, meaning courts have the power to decide whether or not to grant possession.

The process can be started online by going to www.hmcourts-service.gov.uk.
Small Claims Court

Whether or not possession is sought or granted, landlords can use the small claims court to recover unpaid rent as well as any other monies owned by tenants. This is a relatively simple procedure and can be commenced online by going to www.moneyclaim.gov.uk. However, a current address will be needed to serve the claim, so if the tenant has moved out some groundwork might be necessary. This is where the importance of records comes in, since landlords should have asked for the address of a next of kin when the tenant first applied.

There will be court costs (landlords can include these in their claim and also add interest). However, other legal costs cannot be reclaimed in Small Claims Court proceedings.

If the landlord is successful in court but the tenant still refuses to pay, one option open in the case of employed tenants is to seek an attachment of earnings – a relatively simple process in which the employer is instructed by the Court to make weekly or monthly deductions from pay: these amounts are paid to the court and subsequently to the landlord. For more on this, go to www.hmcourts-service.gov.uk.