Rent arrears are a real concern for UK landlords they can have a significant impact on their ability to pay their mortgage and ongoing bills.
Landlord & tenant lawyer Will Bartley looks at landlords experiencing rent arrears during the COVID-19 pandemic.
What are rent arrears?
The money owed for unpaid rent is also known as ‘rent arrears’. Rent arrears are ‘priority debts’ meaning that they have serious consequences. Landlords can usually evict a tenant if they fail to pay, also known as ‘seeking possession’. There is no longer a ban on Landlords commencing Court proceedings due to the pandemic.
According to the National Residential Landlords Association (NRLA), 840,000 private renters in England and Wales are in rent arrears since the start of the COVID-19 pandemic in March 2020. In addition, 1 in 5 renters in arrears have rent debts of over £1000.
What can a landlord do to collect unpaid rent?
Landlords can enforce their right to receive rent, by either commencing possession proceedings in Court or commencing a money claim in Court if you are not looking for a possession Order.
Landlords are also being encouraged to mediate with their tenants who are in rent arrears and attempt to agree a rent deferral or payment plan to enable the tenants to stay in place, whilst gradually repaying any arrears that may have accrued.
What is rent deferral?
This is an agreement between the landlord and the tenants that accrued rent arrears will be paid off at a later, agreed upon date, perhaps in instalments as a top up to the ongoing monthly rent.
It is not an agreement to wipe off the arrears owed by the tenants, and they will still need to pay the arrears at some stage, or face Court action against them.
Can a landlord evict a tenant during the COVID-19 pandemic?
Landlords can commence eviction proceedings against their tenants, especially if there are substantial rent arrears (equal to or more than 6 full months of arrears).
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