My tenant insists they can clear their rent arrears in two months’ time when they get an inheritance: Do I need to wait or can I take possession?
- A tenant at least two months in arrears can be ordered out by a county court
- There are circumstances where a a possession order is no longer mandatory
- We speak to a legal expert about what landlords and tenants need to know
I have an assured shorthold tenant who insists they can clear rent arrears in two months’ time when they will receive a legacy from a relative’s estate. They say I must wait for then. Is that right? E.M
Arrears: Tenants who are at least two months behind with their rent can be ordered out by a county court – but this is not always a given
MailOnline Property expert Myra Butterworth replies: A tenant behind with rent on their home can be ordered out by a county court.
However, there are certain circumstances where this is not a given and a possession order is not made.
We speak to a legal expert about what tenants and landlords must know when it comes to settling arrears.
Stephen Gold, ex-judge and author, explains: You are not compelled to wait. A private tenant behind with rent on their home in England can be ordered out by the county court.
If at least two months in arrears, both when the landlord gives them notice seeking possession and when the judge hears the case, the court has no discretion about it.
A possession order must be made, provided the landlord has not slipped up with the paperwork.
The judge is not entitled to adjourn a hearing to allow the tenant to reduce the arrears to less than two months – even until the next day. However, it might be different if they have left the money on the bus on the way to court and will be back that afternoon after a visit to lost property.
If the tenant has reduced the arrears to less than two months’ worth – by one penny would do – a possession order is no longer mandatory.
But where there has been persistent delay in paying rent, even if there were no arrears when the court case was started, the judge has a discretion to order the tenant out.
This is also the case if there were some arrears when notice was given and the case was started, whatever the position at the hearing, and despite the absence of persistent default.
An outright possession order on these discretionary grounds is unlikely to be made if the arrears were covid-related and there is a reasonable plan to clear any rent still outstanding, although the court might make a possession order that is suspended so long as current rent is paid along with an amount off any arrears.
If the landlord is going to give notice and start a court case, it makes sense for them to rely on all grounds for possession available: the mandatory and the discretionary grounds mentioned.
And the landlord who wants the tenant out whether or not they get the arrears paid off, could go even further provided any fixed term for the tenancy has come to an end.
By giving the tenant a two-months no-fault Section 21 notice as well – they should state that the second notice is ‘without prejudice’ to the first notice – they will avoid being stymied if unsuccessful in obtaining a possession order on either of the discretionary grounds.
Stephen Gold is a retired judge and author
A second claim could be launched once the two months had expired and would almost always be dealt with on paper under an accelerated scheme.
The Government is committed to abolishing no-fault eviction notices, although it would take a brave person to bet on when abolition is going to be effective.
Possibly, your priority is to get the arrears settled and obtain some comfort about future rent, and not necessarily see the tenant on their way.
You could ask the tenant to put you in touch with the solicitors acting on the winding up of their relative’s estate.
This would enable you check out the tenant’s story with them and seek their undertaking, with the tenant’s consent, to pay you what you are owed when the legacy is available.
You could also make it a condition of not pressing on to get the tenant out that, if the legacy is sufficient, you are paid some advance rent from it, as well as interest on the arrears.
A well-drawn tenancy agreement should provide for interest. If it does not, the court will usually award interest on arrears when giving a judgment at the rate of 8 per cent.
Incidentally, there is no limit on the amount a landlord can generally collect for up-front rent. But there is now generally a limit on a rent deposit, which will be held by the landlord until the end of the tenancy and only be dipped into if the tenant fails to make a payment. Thanks to the Tenant Fees Act 2019, this limit is five weeks’ rent.
It is not unusual for a tenant to defeat a landlord’s claim for possession on the basis of rent arrears.
Paying down debt: If a tenant has reduced the arrears to less than two months’ worth, a possession order is no longer mandatory, says Stephen Gold
As a judge, I regularly had to dismiss these claims. In most cases, that was because the landlord had gone it alone and not, at the least, taken legal advice on drawing up the notice seeking possession. Getting that wrong can be fatal to a claim.
On the other hand, the tenant had often wisely conferred with a law centre – or an organisation such as Shelter – or sought free help from a duty housing advisor who is more often than not available to help out at court on the days possession case are heard.
Other successful defences may be based on the landlord not having repaired as required by law or the tenancy agreement, with a crossclaim that might reduce or even wipe out the arrears.
And a no-fault notice may not be worth the paper it was written on if the landlord has failed to protect the tenant’s deposit with one of the approved Government schemes or to give the tenant prescribed information about protection.
This also applies if the tenant has not been given an energy performance or gas safety certificate, or an eight-page government checklist on renting.
A tenant who wants to put a plan together to pay off their arrears could seek a 60-day breathing space by obtaining a debt relief order through a debt adviser.
During this time, the landlord would be paralysed from both giving them notice and starting a court case relating to the arrears. A no-fault notice would not be affected.
Wales has beaten England to tenancy reform with the Renting Homes (Wales) Act 2016 that eventually came into force, as amended, on December 1, 2022.
Eviction procedures are similar to England, but tenants’ rights have been enhanced and the jargon has been changed. In relation to no-fault evictions, the minimum notice to be given by the landlord is six months.
This already applies to new agreements. It extends to pre-December 1, 2022 agreements from June 1, 2023. Wales has its own legislation banning certain tenant fees.
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