To offer a financial incentive to my tenants to move out?

[Wherediditgo]

Tenants are struggling and have fallen further and further in to arrears. The first time they were short by £200, I just wrote it off as a ‘good will’ gesture as I had only just taken over the tenancy.

Every time they’ve paid late so far, they’ve emailed the letting agent to let them know and I haven’t pushed back. They’re about £1000 in arrears now.

To complicate the matter further, DH & I have decided to separate, and I am looking to move in to the house they currently occupy. They have already told the agent they’re looking elsewhere as they’re struggling to afford the rent. The agent seems sceptical. Do I:

A. Serve them notice (now 4 months) and wait, knowing full well they’re probably not going to pay the rent for the remaining time they’re there

B. Offer to clear their arrears if they move out sooner? How would this work legally I wonder? Would I have to get them to give notice to me?

C. Another blindingly obvious suggestion that I haven’t thought of.

Please be kind, I know on the whole MN doesn’t like landlords... but I’m struggling with getting my head around my emotional situation, let alone my financial one.

Not that it matters hugely, but the tenants are starting to get snarky with the agent now too...

I think if you give them notice even though it’s only 4 months now rather than 6 months you will be lucky to evict them this side of Christmas

Courts are hugely backlogged and evictions are still running really really slow yours won’t be a priority as the courts will be dealing with every other possession notice before you .
If your tenants are struggling now they will probably continue to struggle and will possibly not bother paying the rent knowing that you can’t evict them
easily .
It sucks but if I were you I would ask them if they want out of the contract with no CCJs - potential court orders and let them go as quickly as possible
Horrible as it is - let them go and be someone else’s problem

Your only chance is eviction.

If they leave because you paid them off the council won’t help because it making themselves intentionally homeless.

Serve the notice but it’s going to take a long time. My neighbour stopped paying full rent last March. The landlords only just got the possession order this month.

If they stop paying the rent the council shouldn’t help them either as they have intentionally made themselves homeless and depending on where you are in the country they may have a pretty good chance of getting a council place or more chance of winning the lottery 😂
Do they have children as that will go in there favour .
How old are they ( the couple ) and do they work
I think now with Covid landlords have to jump through a few more hoops
I know that my council and HA have to do this pre eviction stuff to see if it’s really necessary to evict

There is a council house opposite where I live the Tennant hasn’t lived there since April 2020 due to a violent incident and he can’t even come within 200 meters of the street till August 2022
The council are aware of this and have done nothing
I don’t even think they have started the eviction procedure yet

I would serve them notice but offer to them they can stop paying rent as soon as they leave rather than have to pay for remaining 4 months

Agreed with @Spiderplantsoutside - serve notice now so it’s up and running as a worst case scenario plan. Then offer to let them leave without any debt or future rent payment if they are out by x date.

Just tell them if they can't afford it and want to move to a cheaper place that you will happily let them break their contract with no penalty for leaving at thei earliest convenience

(Make sure you get your agent to agree that you don’t have to pay their cut if they leave early though!)

I'd look at the contract with the agent.
Is there a break clause in the contract where either party can withdraw if not working out? (sometimes there is one at 3 months)

Did the agent carry out correct affordibility checks and reference checks on the tenants, if they got you bad eggs through negligence do you have comeback? Could you use this to push agent to help tenants find other digs.

Do the tenants have a guarantor that you could chase for the money? You could threaten to do that, but say you won't if they move.

Will the money in the deposit scheme cover the shortfall? Can you claim on that? You could offer not to claim on the deposit if they move out.

Talk to the tenants, say you are aware that they are struggling and it's not working out and that you are happy for them to move out and release them from the contract (is is a fixed term one or a rolling one?)- you've tried to be accomodating and gone easy and don't want to go to court and wreck their reference history etc but... (unless this is what they want as they are trying to get a council place and need to be evicted).

I'd offer not to do things first (e.g. claim on deposit/chase guarantor etc) before offering money. If you offer that first they may push for more, they already owe you quite a lot.

Just tell them if they can't afford it and want to move to a cheaper place that you will happily let them break their contract with no penalty for leaving at thei earliest convenience

That assumes a cheaper place exists.

Wherediditgo, talk to your tenants directly, not via the agents. Find out what their situation is, what barriers there are to them moving, even (tactfully) check they're claiming any support they're entitled to. Once you have a fuller picture of what they might do, you're much better placed to find a mutually agreeable solution.

Could your husband not move out of your current house instead? Surely he'd be much more able to find a flat/house to buy/rent if you're a financial position to own extra properties.

Your tenants may not be able to find anything else and become homeless, it sounds like they genuinely have been trying to pay but struggling rather than choosing not to.

araiwa' suggestion might work otherwise.

meant to say if you need to move in then definitely give them the Section 21 notice for four months.(as long as they have been there 4 months) If they are getting snarky with the agent then it's likely they won't pay off any arrears or want to pay full rent ongoing so start things now. Then keep checking on the house, they may just do a flit one day.

They have a small child and apparently, another on the way.

The agent did full checks and the tenant has a guarantor in place. We bought the property with the tenants in situ.

They’ve promised a payment of £1000 on 18th... which I’m not holding my breath for... but was thinking of waiting until then and serving them notice at the end of this month and then offering a cash incentive on a sliding scale, depending on how soon they move out?
I.e. if you vacate within a month, I’ll write off arrears and give you £1k
If within 2 months it’s £500
3 months £250

Depending on how much they still owe come the end of this month?

Thinking if they end up being stuck there for 6 months or so without paying any more rent, I’ll be over £4K out of pocket PLUS what they owe me now. Not to mention the costs of eviction etc

So why isn't the guarantor paying the shortfall, isn't that the point of them?

I wouldn't be offering money on top of writing off their debt and I wouldn't do a sliding scale. Just "out by this date and I'll write it off" or nothing. Problem with your sliding scale suggestion is that for a tenant struggling financially, clearly the best option is going to be to stay there until the latest date you give because the whole period will be rent free, plus they'll still get a bit of extra cash on top.

The letting agent has only just made the guarantor aware. Apparently, they didn’t believe they were a guarantor anymore as we are new landlords

I guess the letting agent hasn’t actually asked the guarantor to pay as the tenants keep promising a payment plan. Which so far, they haven’t stuck to.

Surely as you have a guarantor you wont find yourself in even further debt?

Also - the letting agent said they could contact the guarantor until they were a full month’s rent behind. Which they now are.

@Anna727b

Could your husband not move out of your current house instead? Surely he'd be much more able to find a flat/house to buy/rent if you're a financial position to own extra properties.

Your tenants may not be able to find anything else and become homeless, it sounds like they genuinely have been trying to pay but struggling rather than choosing not to.

araiwa' suggestion might work otherwise.

You know nothing of the OP's finances and it's really rude of you to presume. No, the OP's husband should not have to move out and pay rent on another place to live when they are financing two houses already. Why do you think this is fair?

Agree a sliding scale but dont give money on top.

"Tenants, if you can be out of the property by 30 June, I will clear your arrears. If you can be out by 31 July I will clear 50% of your current arrears (Julys rent payable). Alternatively, I can serve the 4 months notice but you will be liable for full rent throughout plus the arrears as they currently stand"

@BernadetteRostankowskiWolowitz

Surely as you have a guarantor you wont find yourself in even further debt?

What happens if the guarantor doesn’t pay though?

Then you go to court.

www.citizensadvice.org.uk/housing/renting-a-home/using-a-guarantor/