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...

If they're about to pay you £1000 they'll have no money for a deposit for a new place. I'd be tempted to tell them they don't have to pay anything if they can be out by the end of the month. But if they aren't out you will serve notice and contact their guarantor etc.

@BernadetteRostankowskiWolowitz

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"

This suggestion makes sense if they don’t pay up on 18th June. I guess I was worried that the longer they stay, the less likely I will be to get any future rent from them.

I also thought that if they DO pay me on 18th, and I can promise a cash payment back but only on full vacation by x date and satisfactory inspection that I’d have more control that way.

Maybe I am complicating things.

Id be coming down hard from now. They have tested waters from day 1 and think they can get away without paying full rent- why would they voluntarily move to another property they cant afford?

Id be serving notice today and speaking to agent about chasing guarantor. Everything written down from now.

I've been in the same situation, a tenant in arrears.
When the debt got to £2500 I gave them £800 to vacate.
I did this not as cash but as a deposit for their next rental.
Far cheaper and far quicker than going to court.
But it still hurt giving away so much to bad tenants.
Did you do a financial check on the guarantor?
Was the guarantor statement signed before the tenancy agreement?
Good luck

@An0n0n0n

Id be coming down hard from now. They have tested waters from day 1 and think they can get away without paying full rent- why would they voluntarily move to another property they cant afford?

Id be serving notice today and speaking to agent about chasing guarantor. Everything written down from now.

This is what the agent said. I wanted to give them the benefit of the doubt the whole way but the agent was more ‘give them an inch...’

These are people though and it’s their home... I feel bad for them and want to be as fair as possible but my current circumstances mean I have to move out and don’t want to delay much longer.

@purpleleotard

I've been in the same situation, a tenant in arrears. When the debt got to £2500 I gave them £800 to vacate. I did this not as cash but as a deposit for their next rental. Far cheaper and far quicker than going to court. But it still hurt giving away so much to bad tenants. Did you do a financial check on the guarantor? Was the guarantor statement signed before the tenancy agreement? Good luck

How did that work, did you pay the deposit directly to their next landlord?

op firstly get the agent to chase the guarantor for the arrears, that is what they signed up to to be responsible if the tenants cannot pay.

Tell the agent in no uncertain terms that they have an obligation to try hard to get you your outstanding rent, and to do just that via the guarantor.

Next go and speak to them directly to get a feel if anything is salvageable, be direct with your questions, and get the full picture as to why they are in arrears,this will define your next move.

There is a big difference between a family struggling though no fault of their own ie job loss, illness.
and those who choose not to pay but can afford to, or are feckless with money.

Be direct but helpful, and find out the actual facts,. As you need the property for yourself then your aim is to reclaim the house, so keep that in mind.

Find out what they can afford and see if that is possible in your area, if so help them by agreeing to give a decent reference, and maybe wipe the arrears or part of,
Your fastest and best outcome is to assist them to find somewhere they can afford and then accept a loss of the rent. Don't offer cash but do help them, often people cannot see the wood for the trees when debts start piling up.
This way you help them relocate and get your property back much faster than by going down the eviction route. Everyone wins.
although with some losses to you, but probably less than waiting for a lengthy eviction.

[quote BernadetteRostankowskiWolowitz]www.citizensadvice.org.uk/housing/renting-a-home/using-a-guarantor/[/quote]
Thanks for this. I have been through a small claims court before for something entirely different so it’s not an issue.
The guarantor is the mother of the woman that lives there. The agent reckons she is probably now the one sending emails on behalf of her daughter as the tone has changed so dramatically.
Perhaps when she learns she is liable for everything and could get taken to court, she may try to convince them that moving out is in their best interests!

Doing a deal for a deed of surrender ( and make sure you get that otherwise they can take your money and still not go) is probably the best bet. Hope they don't realise that the council won't help them.

The fact that you want to move in doesn't speed up the process.

Check that the guarantor both is still a valid guarantor, and probably has the money to pay.

If this is the case, you're free to sit tight then chase them for the arrears at any point.

If it's not the case, your best option is to get the tenants to surrender the tenancy in return for not owing the rent arrears. But make sure you get any agreement looked over by someone who knows what they're doing (and many letting agents don't know what they're doing!) so that the arrears are only voided if the tenant actually leaves by the agreed date.

Get rid of them.

Wait for your £1000 to be paid first and then start eviction proceedings.

@drpet49

Wait for your £1000 to be paid first and then start eviction proceedings.

Ordinarily, this is what I would do. But it’s my best interest to get them to move out sooner if I can, as I will be moving in. Eviction could take months and months.

@safariboot

Check that the guarantor both is still a valid guarantor, and probably has the money to pay.

If this is the case, you're free to sit tight then chase them for the arrears at any point.

If it's not the case, your best option is to get the tenants to surrender the tenancy in return for not owing the rent arrears. But make sure you get any agreement looked over by someone who knows what they're doing (and many letting agents don't know what they're doing!) so that the arrears are only voided if the tenant actually leaves by the agreed date.

They are a valid guarantor. No idea about whether they can afford to pay, though.

The woman (and the tenant) were both very surprised that she was still classed as the guarantor as they ‘have a new landlord’
So maybe they will pay up...

Either way I’d like them out sooner rather than later!

Firstly, when is the contract term finishing? Giving notice during contract term is only possible via section 8. Getting an eviction granted under section 8 is much harder than section 21. I believe it only takes them to make one payment that puts them under less than a month overdue and it's good and you have to start again.

Secondly, you need to mKake sure everything is watertight. For instance, do you know that a guarantor agreement has to be witnessed by another 18yo? That's one of many detail that can mean that you go to court and your case is thrown out. Don't assume the agency knew what they were doing and protected your interests. The lock of understanding of the system by many letting agents is shocking. It's made even more risky in your case as you picked up the tenancy in situ. Are you sure that the deposit was protected within the rules?

If I were you, I'd ask to meet with them to come up with some form of agreement. Assess what their chance would be of them finding another property to rent they can afford. If that's possible, promise them a reasonable reference, then if that's not enough of an incentive, offer to wipe out what they owe. Only offer extra if it's the last resort and you are very desperate. Do EVERYTHING in writing.

@araiwa

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

id do that

I would also be speaking to the letting agents who seem to have let you and the guarantor down by not informing them of a different landlord. they seem to have been derelict in their duty.

I would begin eviction proceedings on 18th as at least you have a chance of that money being paid.

I would then separately inform the guarantor that if the outstanding balance and any remaining rent wasn't paid I would immediately issue court proceedings to pursue the full debt.

@crosstalk

I would also be speaking to the letting agents who seem to have let you and the guarantor down by not informing them of a different landlord. they seem to have been derelict in their duty.

No, sorry - maybe I didn’t explain properly.

The letting agent did of course inform tenants of guarantor that they had a new LL.

The tenants and the guarantor mistakenly believed that this meant that the guarantor was no longer the guarantor.

Notice to evict and pursue guarantor for shortfall as a priority now. You then have clear legal leverage in place.

If you decide to come to some other written agreement for them to vacate sooner and they abide by it then you have an actual agreement to the benefit of you both.

If they agree and then default (eg they argue for just one more month etc.) then you have the legal timetable for eviction still pushing on in the background.

@Waspsarearseholes
Okay well that's fine if the OP genuinely couldn't afford to move elsewhere or for her ex to move elsewhere.

The reasons I think my suggestion is fair are:

1. The family involved could be made homeless with a young child and whilst the female tenant is pregnant; causing them significant distress.

1. It's very likely that they simply don't have the money to pay rather than that they are choosing not to- a lot of the posts on this thread are based on the assumption that they are somehow 'bad tenants' who are 'refusing to pay' but what choice do you have if you're genuinely poor?

I would much rather a wealthy man pay rent on a flat than a poor family with young kids be made homeless.

Seems a bit of a coincidence that they stopped paying when they though the change of landlord meant the guarantor was no longer responsible. I would start proceedings if the don't pay you the £1,000 as agreed and would not pay them a penny.

Clearing the arrears won't help they most likely won't pay them anyway.
I know folk lost their job during the pandemic I did too however rent comes first, some folk have jumped on the bandwagon with eviction bans.
They're not reliable go the legal route they could stop paying altogether while waiting.
Did you get references?

From experience OP the minute you serve notice any rental income will stop because they will start saving for their new place. The will not move until they can either afford to or evicted.

They just might not have the money too. We've had BAD tenants in the past and its the reason why we sold them but some just really fell on hard times and couldn't pay, not because they were being malicious.

Serve the notice now because it might be a long road ahead. Its nice to write off the arrears but they won't move until they can so it might be pointless. Serving notice is the same as letting them out of the contract.

I'd weigh up the cost of taking them through court proceedings to the cost of the cash insinuative. But I wouldn't bother with the sliding scale as its pointless what can they do with 250 quid?

If the guarantor doesn't pay its them you take to court. Another lengthy and often costly pursuit.

Honestly if I was in your position I'd serve notice and give them the grand to move out with. Much less stressful - especially is your're going through a break up.

I would actually come down on them pretty hard. A letter giving them 7 days to pay the arrears, sent to the tenant and the guarantor. I don't know if I would serve a s21 yet, it will be dated in 4 months which the tenant may think they are getting evicted anyway, might as well not pay any rent and wait for eviction.

Wait until they come to you and have a discussion before offering anything, the letter to the guarantor may well be enough to get the money coming back in. If they do fall 2 clear months into arrears then you can serve a s8 notice. Which is different to a s21 as you don't have to wait until the tenancy ends and from memory it's only a months notice. Disclaimer, it's been a good few years since I worked in this field.