7 Day Letter

[NSP5]

I've got a troublesome tenant, who despite continued reminders (from both myself the landlord and my managing agent) continues to come back with miniscule rent payments.

Its come to the point now where i'm getting fed up with his excuses and want to take things a step further.

The managing agent has suggested a 7 day letter...does anyone else have any experience with these?

Also, would I be correct in assuming the tenant has to pay my solicitor charges?

I thought it would have more of an impact, than a letter from myself/the agent.

Thanks in advance

 

[KateCB]

Technically, you can charge the tenant for any charges you incurr whilst attempting to recover rent arrears, however, if they are having trouble paying the rent, adding another cost to it won't help get the money out of them!

Can't you draft something your self, stating that you require £xxxxx by xxx Date, or you will be passing the details to your solicitor for legal action to be taken to recover the debt?

Writing to inform them of your intent may stir them into action - if it doesn't then get the debt collectors/solicitors involved, as it may be a long a messy court battle to get what you are owed or to terminate the tenancy due to breach of contract (non payment/shortfall payments of agreed rent) - hoping of course that the tenant is still in business to fulfil obligations at the end of it.....

 

[NSP5]

Thanks for your reply...

He's struggling rent wise, but has some equity within his house- and so thought it may push him towards either increasing his mortgage to release some cash, or putting a charge on.

He's pretty much ignored the letters which have come from the agent, and we struggle to get him to take it seriously, I was hoping a threat of legal action my stir him.

Also I forgot to mention he's actually out of contract at the moment, and holding over at full rent!

Do you know much re having a charge on houses?

 

[HFE Signs]

Be careful, the reason you can't get the money is because they have none, if you add in solicitor fees you'll be waiting for that too.. Stick strictly to the contract rules and get them out.. people like that are not good tenants.. excuse after excuse.. been there, only one answer here I'm afraid.

 

[M-C Hoare]

Silly qu - is this residential or commercial property?

 

[NSP5]

Silly qu - is this residential or commercial property?

Not a silly Q, I shouldve really mentioned that in my OP- its commercial.

HFE- he's definitely not cash rich, you're right- its the equity within his residential property that we'd be going after.

I take no pleasure in doing this, but as you say, excuse after excuse.

 

[Geoff T]

...excuse after excuse.

?
excuses like...

"no money out there"

"things are bad"

if you force your tenant to sell the residential property at a loss (which will probably be the case right now, bearing in mind the housing market) how will that get you paid? It will just add another - preferential - creditor to the mix...

 

[NSP5]

?
excuses like...

"no money out there"

"things are bad"

if you force your tenant to sell the residential property at a loss (which will probably be the case right now, bearing in mind the housing market) how will that get you paid? It will just add another - preferential - creditor to the mix...

Yeah pretty much the above...which I accept and appreciate, hence why i've given him as many chances as I have, but my patience is running thin now. The unit is in the City Centre (Leicester) and is in a fairly decent area, so whilst there are quite a few empties in some parts of town, my side seems to have held up well...so i'm thinking of finding a new tennant and throwing in some rental incentives to speed up the process.

Good point re the house sale, but from what I've been told- the house value is circa £200k, with approx £65k mortgage.

 

[GlenCB]

I feel that people seem to often think that landlords have to be sympathetic to the hard times of their tenants, they often think that because a landlord IS a landlord they can afford to not be paid or be paid late!

Yes things are bad, but they are bad for us all, if this guy cannot pay his rent he should hold up his hands and tell NSP5 that he cannot pay and can they end the contract, that way the tenant is not accruing more debt and NSP5 can find a tenant that will pay.

I would suggest exactly that to the tenant and see whether you got the same excuse.

 

[mhall]

Things are very bad, but far too many people are using it as an excuse for not paying rent thinking that the landlord is an easy touch and they have rights of occupation. Sadly people in trouble are usually given the advice to pay people in order of importance - Staff, suppliers, VAT, tax, rates, rent, self - so the landlord is way down the list. Another silly question though - was the agreement signed with a personal guarantee ? I would assume he is giving you small payments to try and keep you quiet but, more importantly, also so that you can never actually send him a demand for an amount as that is changing

End of this month will be very interesting as the quarterlys are all due - look out for the High Street to get even emptier

 

[Cicero]

Technically, you can charge the tenant for any charges you incurr whilst attempting to recover rent arrears .....

Do you have any authority for this bold statement?

1) If the lease contains a costs clause, it is almost certain to provide for "reasonable" costs. If not, a judge will usually find a way to decide this.

2) If the lease is silent, then all the OP gets is fixed costs.

 

[Alan R Price]

NSP5

It's decision time. Either you try and work with the tenant to help him sort things out, which may lead to you getting paid in due course or you take action. It seems however that you have given him a very fair opportunity to make you an offer or come to some accommodation with you and he is not cooperating.

It also seems he has equity in his house so if you are satisfied he is not going to pay you in the current situation you can sue him for possession and the rent arrears. If he fails to pay up you can ask the court to grant you a charging order over his house to secure your debt.

My suggestion is to write him a firm but reasonable letter saying that you understand his problems but that he has a legal obligation to pay you; that you have tried to work things out with him but he has not come up with any satisfactory proposals and that unless he does so within seven days you will have no alternative but to take legal action. Say you are willing to sit down with him and work out a realistic payment schedule if that will help. Send the letter by recorded delivery and ordinary post or email - or better still hand deliver a copy. If he fails to respond satisfactorily within the seven days, go in hard and instruct solicitors.

 

[NSP5]

Thanks for the replies.

To begin with, I was slightly more lenient/accepting of his excuses (which i'm sure are valid due to the climate), as I had a bit of a buffer amount to cover mortgage payments....this is now running low, and I prefer to keep a bit in there for contingency.

Mhall- I inherited the lease from the previous landlord, which is in the tenants personal name, as opposed to a Ltd company....so would this act as a personal gaurantee so to speak...unlimited liability and all of that?

"if the lease is silent"....what does this mean?

 

[Alan R Price]

Thanks for the replies.

Mhall- I inherited the lease from the previous landlord, which is in the tenants personal name, as opposed to a Ltd company....so would this act as a personal gaurantee so to speak...unlimited liability and all of that?

"if the lease is silent"....what does this mean?

If it's in the tenant's name, it is not a personal guarantee, it is his own direct personal liability: the company is not a party to the contract and therefore cannot be liable under the lease (although if the company is in occupation there may be other claims against it but let's not complicate the issue).

"the lease is silent [about something]" means "the lease does not mention [whatever the something is]".