As our regular readers may know, our CEO is a big fan of the Telegraph (for our US readers think New York Times), so the headline to this blog piece (which appeared in the Daily Telegraph) is a recurring theme which affects landlords of all shapes and sizes with rental property.

In fact as a Business Solutions group we would say a landlord and tenant problem of unpaid rent hits our desks nearly every day of the week.

The problem of unpaid rent for landlords falls into two camps which are

• the tenants who stay in the property and don’t pay their rent

• the tenants who do a “moonlight flit” from their rental property, leaving the unpaid rent in their wake

For tenants who stay in their property without paying their rent there is no doubt the law has a clear process for a landlord to follow under the various Landlord and Tenant Acts. An eviction notice is the ultimate outcome for this type of situation but it still doesn’t mean the rent is going to be paid. So be prepared to go all the way to get a judgment for the outstanding rent and a possession order to evict a tenant. This can be costly but there are no shortcuts. Of course, if you oust your non-paying tenant, you can replace that tenant with a tenant who ticks more of the boxes in being a “good tenant”. It may be cold-comfort, but you can also net off your unpaid rent against your security deposit. It is not an ideal situation but at least you have moved forward.

For tenants who leave a property owing rent, then you can take steps to recover the money from the tenant by issuing a county court claim against them for the value of the rent. Your plan should be to enter judgment against a non-paying tenant and then track them to their new property and enforce payment.

Of course this is not always ideal. We are really talking about rogue tenants who deliberately go out of their way to avoid paying their rent even though they can. We are not talking about tenants who are in severe financial difficulty.

What can Shergroup do to help?

Our action plan for recovering rent from rogue tenants is as follows:

1. Use our Investigation Solution to find the person. Usually they leave a “footprint” in their credit file – and this leads us to their current or last address which enables court proceedings to be issued and enforcement action to follow.

2. If we are able to find someone using our trace report, then it means you can send a Letter Before Action (a necessary step in the legal process to collect a debt) – we can do this for you through our sister company, Shergroup Legal

3. Once a claim has been issued, and there is no Defence or Counterclaim to hold up the process, you can enter judgment against your rogue tenant

4. The impact of a CCJ on a person’s credit file is considerable, as it will stay on their credit file for 6 years unless it is paid within one month of the judgment being entered

5. If the impact of a CCJ on your rogue tenant isn’t enough to encourage them to pay the outstanding rent, you can instruct Shergroup Enforcement to enforce the CCJ provided it is over £600 in value, which will include court costs and interest. Check out our Transfer of a CCJ Solution which costs £156 inclusive of court costs and VAT

6. We will manage the transfer of the judgment to the High Court and under the authority of our own High Court Enforcement Officer, Mrs Claire Sandbrook, we will use High Court Enforcements Agents to knock on the door and enforce payment of the CCJ

7. 7. And as a back up plan we can advise on all the other methods of enforcement available to you against your rogue tenant to achieve the best possible outcome

If you would like to use a decisive and friendly team to solve your dilemma then speak to one of our experienced Business Solutions Advisors TEAM on your next step. We have everything a landlord needs to recover unpaid rent from tenants who are WON’T PAYS, rather than CAN’T PAYS.

FAQs: Recovering Unpaid Rent from Tenants

General Questions

Q: What are the two main types of unpaid rent situations landlords face?

A: Landlords typically encounter two scenarios: tenants who remain in the property without paying rent, and tenants who abandon the property (do a “moonlight flit”), leaving unpaid rent behind.

Q: Can I use the security deposit to cover unpaid rent?

A: Yes, you can offset unpaid rent against the security deposit held for the tenant. While this doesn’t solve the entire problem, it can help recover some of the losses.

Q: What’s the difference between “won’t pay” and “can’t pay” tenants?

A: “Won’t pay” tenants are rogue tenants who deliberately avoid paying rent even though they have the means to do so. “Can’t pay” tenants are those in genuine severe financial difficulty. The recovery strategies discussed are specifically for rogue tenants who choose not to pay.

Legal Process Questions

Q: What is the first legal step to take against a tenant who has left owing rent?

A: You should issue a county court claim against the tenant for the value of the unpaid rent. This is the foundation for entering judgment and eventually enforcing payment.

Q: Do I need to send a Letter Before Action?

A: Yes, a Letter Before Action is a necessary step in the legal process to collect a debt before issuing court proceedings.

Q: What happens if I get a CCJ (County Court Judgment) against my tenant?

A: A CCJ stays on the tenant’s credit file for 6 years unless paid within one month of the judgment being entered. This can significantly impact their ability to obtain credit, rent property, or secure mortgages.

Q: What is the minimum value required to transfer a CCJ to the High Court?

A: The CCJ must be over £600 in value (which includes court costs and interest) to be transferred to the High Court for enforcement.

Eviction Questions

Q: What is the ultimate outcome for tenants who stay without paying?

A: An eviction notice leading to a possession order is the ultimate outcome. However, you’ll still need to pursue a judgment for the outstanding rent separately.

Q: Are there shortcuts to evicting a non-paying tenant?

A: No, there are no shortcuts. You must follow the proper legal process under the Landlord and Tenant Acts, which can be costly but is necessary to legally evict a tenant.

Shergroup Services Questions

Q: How can Shergroup help me find a tenant who has disappeared?

A: Shergroup’s Investigation Solution can trace people through their credit file footprint, leading to their current or last known address, which enables court proceedings and enforcement action.

Q: What does the £156 Transfer of CCJ Solution include?

A: The £156 fee (inclusive of court costs and VAT) covers managing the transfer of your judgment to the High Court and enforcement through High Court Enforcement Agents.

Q: What happens after the CCJ is transferred to the High Court?

A: Under the authority of Shergroup’s High Court Enforcement Officer, High Court Enforcement Agents will visit the debtor’s address to enforce payment of the CCJ.

Q: What if High Court Enforcement doesn’t work?

A: Shergroup can advise on all other methods of enforcement available against rogue tenants to achieve the best possible outcome for recovering your unpaid rent.