Landlords - How to deal with rent arrears during the pandemic

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 Jason Grimster 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).

How much notice does a landlord have to give before eviction?

Under The Coronavirus Act, if at least six months’ rent is unpaid; a minimum four-week notice period is required. If less than six months of rent is unpaid, then a landlord will need to give a six month notice period.

Due to the current bailiff ban on evictions (set to run until May 31st 2021), bailiffs are unable to enforce Eviction Orders in all but the most serious circumstances. These can include 'substantial' rent arrears accumulated over 6 months, tenant 'antisocial behaviour' and more.

Update: From 1st June 2021 there are changes to s21 and s8 notice periods , you can read about these changes here.

A specialist landlord & tenant lawyer’s view

Jason Grimster, Landlord and Tenant lawyer, says:

“The rent arrears crisis caused by the pandemic is leaving far too many landlords without rental income, and unfortunately, now more than a year on from the first lockdown, these arrears can be substantial. It is therefore fortunate that possession proceedings can once again be commenced against tenants who have substantial arrears but refuse to leave their property.

Whilst all landlords are encouraged to mediate with their tenants to attempt to agree payment plans, this is not always practical or beneficial to the parties, especially when arrears exceed 6 months."

Eviction Notices and possession proceedings are technical forms to complete and therefore we recommend that you instruct a property litigation lawyer to complete these for you.

Landlord & tenant solicitors in Bournemouth, Poole, Christchurch and The New Forest

If you have any questions regarding rent arrears, the eviction process or any other landlord & tenant queries; please feel free to contact us on 01202 499255.

We offer all new clients a free initial chat with one of our bright, friendly lawyers over the phone or by video call.