Nicola Davies | 15th February 2017

Recovering rent arrears from residential tenants – Part 2 of 2

SHARE

Nicola Davies | 15th February 2017

Recovering rent arrears from residential tenants – Part 2 of 2


Obtained the possession order -√
Done all the checks I set out in my earlier article (Part One)√
What’s next?
In this article I shall summarise for you what you as landlord or agent can do to collect from your tenant the long outstanding rent arrears and court fees that you have incurred after you have obtained a court order.

Q 2 – What enforcement steps can Landlords take after obtaining a Judgment for rent arrears?

  1. Bailiffs
    We instruct High Court bailiffs to recover sums directly from tenants. After applying to the court to transfer the case to the High Court you obtain what is called a Writ of Control which gives the bailiffs the authority they require to recover personal belongings from the tenants to the value of the sums owed to you.
    Cost to you: Court fee of £66 (recoverable from tenants) and £75 plus VAT if the bailiff is not able to recover sums owed after three visits.
    Time Estimate:
    • transferring case to High Court and obtaining Writ of Control – 1-2 weeks
    • 7 day letter from bailiffs to tenants
    • Up to one to two months after that depending on how many visits required.
  2. Statutory Demand
    If you have a judgment debt or debt which the tenant has admitted liability and is over £5000 you can deliver to the debtor a formal demand in a prescribed form stating that if they do not pay the sums owed to you within 21 days you will apply to make them bankrupt; the threshold is a lot less (at £750) if the tenant is a company. Often such notices can elicit quick responses from the recipients as they want to avoid bankruptcy at all costs (including yours).
    You will typically have 4 months from serving the Demand to apply to bankrupt a private individual and the debtor will have 18 days (if based in the UK) from service to challenge the notice and seek for it to be set aside. Individual debtors who apply successfully to set aside a demand are often able to recover their legal costs, so care needs to be taken to ensure this is used properly.
  3. Charging Order
    If your tenant or guarantor owns another property you will want to ensure that this cannot be sold or transferred without them first paying you the sums owed. Debtors will often have 14 days (unless court order says otherwise) to pay the debt owed to you. Once this deadline expires you can apply for a charging order against the property. Unlike court orders that have a 6 year deadline in which you can enforce payment, charging orders mean the debt will usually remain payable until removed from the debtor’s title to their property.
    Recently we acted for a landlord in her early 80s who had the benefit of a charging order made against a former tenant over 20 years ago. On this occasion, after getting back in touch with the former tenant, they ended up paying the rent arrears of £2500 plus interest of around £10,000 that had accrued.

I have covered above the most popular routes landlords take in order to recover sums due to them. There are other options such as third party debt orders which can stop tenants taking money out of their bank accounts or allow you to recover from someone who owes the tenant money. You can also apply for an attachment of earnings order which allows you to take payment directly from the tenants’ wages to pay the debt owed.

Paris Smith’s Property Litigation team is regularly instructed by both private and commercial  landlords to recover possession and outstanding debts from tenants. For more information about landlord and tenant matters please email me.