My tenants are currently in rent arrears, accumulated amount equal to 2 and a half months of rent. Tenancy started in March 25 and they are in receipt of disability allowance and housing benefits. Suddenly from May 25, they have started paying partial rent which I have really struggled with the mortgage payments. They haven’t been upfront and told the letting agent that the delay in rent is due a delay in UC for the bigger property. Partial rent has been paid and at one point they were over 2 months late with rent. The guarantor never replied to the letting agent. Their UC contribution for the bigger property has been approved and after much persuasion UC is now paid directly into the letting agent. As the UC doesn’t cover the full rent the tenants top up the remainder and this has been going well for 2 months. In the meantime I took legal advice through insurance and now in a position to evict the tenants after the legal review and claim the arrears from the guarantor. Tenants have requested to pay the arrears in instalments and proposed a sensible amount. Should I proceed with the legal action or agree to a rent arrears agreement? If a rent arrears agreement is a reasonable way forward please kindly advise of any special clauses that I can include in the agreement? I don’t trust the tenants and I don’t want the be in a position where they don’t abide the rent arrears agreement.
The way you’ve worded this gives me the impression that the tenants are doing their best to pay off arrears due to a UC delay. I’m not sure I’d want to crack this nut with a sledgehammer. Why are you considering eviction which could get very messy if they are on track to pay off the arrears and have a guarantor?
It would help if you could give some background as to your relationship with them, how long they’ve held the tenancy, how they look after the property and why it is that you didn’t approach the guarantor within a few days of the first payment being missed. That’s what a guarantor is there for.
Many thanks for taking time to respond, much appreciate it. I have amended my post to include the full story.
@Oliver29 If you initiate the legal action it’s one way to encourage the tenants stick to their plans to pay the arrears. Why not start it? And give them notice (if there’s a suitable break clause) or suggest a mutual surrender of the tenancy. It’s not in anyone’s interest if they are going to be struggling to pay or if you don’t trust they will pay and are stressed because you are relying on it to pay a mortgage.
Explain you aren’t happy the legal action is a backup in case they don’t leave in a normal way, and you don’t want to have to follow through with eviction as it will go on their record and make it harder for them to find a new place. But as they haven’t been upfront, the guarantor hasn’t responded, it’s all due to their own actions and so you don’t feel you can trust them anymore and it’s better to stop having a financial agreement between you all as a result. You can’t afford to default on the mortgage.
(If you can get rent level needed from others and you need it to cover mortgage payments, why would you keep them? Potentially make them leave with a s21 (or threat of) while you still can)
Things to consider - do you have RGI? Will your insurance cover eviction legal costs? Can you afford it if they stopped paying rent till eviction? Do you have evidence there was indeed a delay with the UC or why don’t you trust them? Do you want to trust your most valuable asset to people you don’t trust? Are you running a business or a charity? How can you mitigate the risk they will break the arrears repayment plan (not a good sign if guarantor won’t reply). Have you explained the situation to bank/lender - you don’t want to miss any payments yourself as can seriously impact credit score etc - bank/lender might be willing to help you with some sort of payment holiday good to know if may be an option
Also I’ve read elsewhere that eviction on some grounds will fail if tenants pay up their arrears just before the court date so use s21 while you still can
Good luck
Ask the letting agent why they haven’t pursued this. Presumably the guarantor was approved by the same agents ? You shouldn’t accept that the guarantor simply hasn’t replied.
Is this a 6 or 12 month tenancy and is there a break clause? In other words, is s21 an option at this point?
If not, then I would certainly serve a s8 now under g8, g10 and g11. I’d probably not pursue court action for as long as they stick to the repayment plan.
I had a similar incident, and the Guarantor ignored all of our emails. Do you then pursue the guarantor through the courts for rent arrears….my tenant has now left and is a student now!!
Yes , the guarantor has agreed to cover the rental liability on behalf of the tenant if the tenant does not pay.
I would not put trust in a letting agent, they do not look after the customer but themselves