Rent Arrears

Rent Arrears - Legal Advice For Landlords

Many landlords will at some point unfortunately find themselves with a tenant in rent arrears.

We regularly advise landlords on their options to recover rent arrears from their tenants. There are several remedies available to landlords, and the approach a landlord takes will depend on its relationship with the tenant, the tenant's circumstances and the landlord's long term objectives.

Some of the landlord's remedies are time limited and can be waived depending on the steps the landlord takes when the tenant falls into arrears. It is important that a landlord take advice quickly, to preserve all of its options available.

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Rent Deposit

If the landlord is holding a rent deposit, the simplest option may be to draw from the deposit to pay the arrears. This will depend on the terms of how the rent deposit is held, the level of arrears, and the tenant's likely circumstances going forward.
Forfeiture

Most leases will contain a re-entry clause, giving the landlord the option of forfeiting the lease if the rent is not paid in accordance with the lease.

The law surrounding forfeiture is complex and legal advice should be sought early on if a landlord would like to preserve its options. If a landlord takes any steps to acknowledge the landlord/ tenant relationship after its right to forfeit has arisen, it may waive its right to forfeit.

The act of forfeiture will bring the lease to an end. Landlords should be careful before taking this step, as if the property is not easily marketable, it will find itself with a vacant property without a tenant.
Service of a Statutory Demand

If the rent arrears are not disputed by the tenant, a landlord may be able to serve a statutory demand on its tenant. If the tenant does not pay the arrears within the relevant timescales, the landlord can then take steps to make the tenant insolvent.

This step can encourage the tenant to pay the arrears, to avoid insolvency proceedings. The downside for landlords is that if its tenant is made insolvent, this may reduce the likelihood of the landlord recovering the arrears, under the insolvency regime.
Court Proceedings

A landlord can issue court proceedings to recover the arrears. Court proceedings can be expensive and the court process is rarely quick. This may however be a good option if the rent arrears are disputed and/ or the landlord would like the lease to continue.
Commercial Rent Arrears Recovery (CRAR)

If CRAR applies, the landlord can instruct an enforcement agent to seize the tenant's goods. There is a formal notice procedure that must be followed before this step can be taken.

There are several restrictions on a landlord's rights to exercise CRAR, and so this remedy should be fully considered and approached with some care.
Guarantees or Previous Tenants

A landlord may have the option of pursuing a guarantor or a former tenant. This will depend on the terms of the lease, and the agreement with any guarantor.

There are strict timescales that must be adhered to if a landlord does want to pursue a former tenant, and the landlord should therefore consider this option early on when reviewing its remedies.
Negotiate With the Tenant

If the landlord would like to maintain its relationship with the tenant, it is sensible for the parties to negotiate and see whether an agreement can be reached (for example, a payment plan could be considered). Whilst this may delay the full recovery of the arrears, this is often the most pragmatic and cost effective option to take.

If a landlord does decide to take this approach, it should ensure that its correspondence with the tenant is without prejudice to its rights under the lease. We can assist with this, to ensure that the landlord does not waive its rights if an agreement cannot be reached.

How Can We Help?

For landlords, our rent arrears solicitors can:

Advise landlords on the remedies available to recover the arrears and the best strategy to adopt
Assist the landlord with the recovery of the arrears, by enforcing the landlord's chosen remedy
Negotiate with the tenant if possible, to recover the arrears as amicably and as cost effectively as possible

There are lots of factors for a landlord to weigh up when deciding how to recover a tenant's arrears. A landlord should take advice on its options at an early stage, so that it can preserve its remedies available, whilst it considers the approach to take.

If you are a landlord looking for legal advice on rent arrears, please contact Michelle Bendall in our Property Litigation team on 0117 314 5326, or complete the form below.

The team's real strength lies in the fact that everyone takes a very commercial approach towards litigation, realising that sometimes a good settlement may be worth more to a client than a judgment from a court.

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Michelle Bendall

Property Litigatio n Services

Other Real Estate Services

Michelle Bendall

Laura Seaman

Katie Hickman

Daniel Hall

Rent Arrears - Legal Advice For Landlords

How Can We Help?

If you are a landlord looking for legal advice on rent arrears, please contact Michelle Bendall in our Property Litigation team on 0117 314 5326, or complete the form below.

Get in touch

Meet the Team

Rent Arrears

Michelle Bendall

Property Litigation Services

Other Real Estate Services

Michelle Bendall

Laura Seaman

Katie Hickman

Daniel Hall

Rent Arrears - Legal Advice For Landlords

How Can We Help?

If you are a landlord looking for legal advice on rent arrears, please contact Michelle Bendall in our Property Litigation team on 0117 314 5326, or complete the form below.

Get in touch

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Meet the Team

Property Litigatio n Services