Getting Your Money Back from a Tenant
How does a landlord get back money owed by a tenant after an eviction?
So finally, a landllord manages to get the tenant out of the rental property, but low and behold they owe the landlord lots of rent. So how does the landlord go about getting their money back?
The landlord should first try writing or talking to their tenant, but let’s presume despite a landlord’s best efforts this has come to no avail.
Note to landlords: Don’t waste time trying over and over again – take the hint.
The next step for a landlord is to take the tenants to court to try and get back some of the money they are owed. Now this sounds scary, but its actually a relatively straightforward process. It involves the landlord filling out a form obtainable online or from the County Court. In this the landlord will need to specify:
- The rent arrears due and for what period
- The interest due on the outstanding rent (if any)
- Additional costs if provided for in the agreement
- Damages to the property
For a landlord to commence proceedings they have to pay a court fee, the amount of which relates to the amount claimed. This fee is added to the claim from the landlord. Once submitted the Court will send this form to the defendant / tenant who will either; pay up, defend, counter claim or do nothing. In many cases the simple threat of court action by a landlord is enough to make the defendant pay up; if for no other reason than if the judgment goes against them it will go on their credit file. Credit files are utilised by all sorts of institutions. They are used when considering loan applications including mortgage applications and credit reference checks as we have already seen. The existence of a County Court Judgment (CCJ) on a persons credit file makes it very difficult for an individual to obtain a whole range of credit and services. For this reason most people seek to avoid them. If a landlord is taking a tenant to court, it might be worth the landlord mentioning this to them, but a landlord needs to be careful what they say as the tenant could turn the situation around and claim blackmail and harrassment by the landlord.
Required information to take a tenant to court for rental arrears
The other criteria a landlord must satisfy in order to claim through the County Court are:
That the landord has an address for the tenant in England or Wales where the documents can be served
The claim is against no more than 2 defendants
The landlord has an e-mail address
Landlords should not get drawn into postponing an action, any correspondence is likely just to be another delaying tactic whilst the debtor / tenant plans their ‘disappearance’. It’s now possible to make a claim online through the www.moneyclaim.gov.uk website which is part of Her Majesty’s Court Service.
The cost of an application is between £25 – £815 depending on the amount claimed and the maximum claim online is £99,999.99. For details of the fees including a calculator.
Landlords using Money Claims Online (MCOL)
Once the landlord has paid the court fee they will be issued with a user id and password and this then allows the landlord to carry out their claim. Following completion of the claim the tenant will be given notice of it through the post.
To make a claim the landlord will need the following information:
Full name (including title) & address (including postcode) of the person(s) a landlord wishes to make a claim against
The exact amount a landlord wishes to claim (including any interest, where applicable)
Details of the claim, ie what it is about
A credit/debit card details
A valid email address
A landlord should also provide the person(s) date of birth if known.
A landlord must pay a fee to issue a claim online. The fee charged depends on the amount a landlord is claiming.
The claim number allocated to the claim must be quoted in all correspondence with the court or help desk.
A landlord getting back their rent arrears
If the decision goes against the ‘defendant’ they will normally be ordered to pay it to the landlord immediately or by instalments. The amount is determined by the Courts. If the tenant or the tenant guarantor cannot afford to make payment in one go but they are working then the Judge can make an Attachment of Earnings Order (AEO). This means that the employer has to make the payment directly from the employees payroll guaranteeing that the landlord will get their regular payments until the debt is paid off.
The advantage for landlords of using the on-line service is that there is no need for the landlord / claimant to make an appearance in person and the court fees are slightly cheaper.
Follow this link for more guidance on using Money Claim Online.