Tenant not paying final month's rent

[Pennina]

I have a rental property. My current tenants, previously reliable, today gave me a month's notice due to business problems. They can't afford the rent any longer.

They've said that they can't afford this month's rent either and that I should keep the deposit in lieu.

From my last visit to the flat, it seems all ok, just reasonable wear and tear but I'm concerned.

DH says I should be very firm and threaten bailiffs etc. I don't think it's worth while as the notice period will soon be up anyway. My view is to live with it and in the event there are deductions to be made for damages, then see how it goes, ie bailiffs as a last resort. We're going to visit flat next week.

Just wondering if anyone else has been in this situation and has any useful advice

Thanks
P

www.landlordlaw.co.uk/landlords/tips/tessas-ten-top-tips-landlords-tenancy-deposits

Read point 6 on that list. I think you are leaving yourself open to be taken advantage of - if there is any damage at all you have nothing left from the deposit to cover it if it has been used for rent. I'm not sure I'd want to risk it.

I don’t think rental deposit can be used as rent, no idea what you contract states but I would certainly check this first.

Secondly if it’s the final months rent and only I would probably not waste my time getting collection agents or bailiffs involved. It will only end up consting you in the short term as if they genuinely don’t have the money to pay it, they still are not going to be able to pay it just because a bailiff is involved.

If I were you I would try and come to some sort of arrangements whereby you agree to a reduced final month of rent, something they can afford and what covers either most or all of your costs. You can then claim from the deposit for any issues with the house.

If they go quietly I would just leave it and take the last months rent from the deposit. Ask them to agree in writing that the deposit is returned to you as compensation for the missing rent.

There is a lot worse that can happen.

If you want to.play hard ball you could say you will take them to the Small Claims Court. However there is a lot of work. First check out inventory (I assume you had a professional check in done.) Then cost discrepancies and provide them with acosted list within 10 days of the end of their contract. Then if they dont accept this, you go to arbitration (again I assume you have registered their deposit properly - not to do so is criminal). Be warned that the arbitration process rends to lean on the side of tenants.

If they rule that money is owed to you, you go to the small claims court, and if they cant pay you could possibly use baliffs.

But a lot of bother. It soundsas if they are having a tough time. Them leaving on reasonably good terms and without you having to evict is a result in itself.

Are you relatively new landlords? Do join a Landlord Association. Paperwork needs to be done correctly otherwise you are sunk.

Contracts I use say rent can be taken from deposit. And it can, if they agree in writing.

I wish we had done this to be honest. We still don’t have all our deposit back although apparently will get in instalments.

I would just take the deposit as last months rent. First making sure the place looks in good condition and having this agreement in writing. Gowing through small claims court sounds like a pain. I have to admit I have done the same as them. Not because I couldn’t afford it but because my landlord was dodgy as hell and I knew he would keep my deposit and I knew I would leave it in better shape than he ever kept it. This is before the secured deposit system. If you feel you can trust them and they are being honest, I’d say take the deposit.

Thank you for all your input that is some really helpful advice which I will bear in mind for future tenants. I have an experienced rent up at my flat is often rented out for quite long periods so I have not had that many tenants if you see what I mean!

I tend to agree that it's probably better just to take the deposit and move on as the alternative won't result in any meaningful resolution prior to the end of the tenancy anyway.

I have asked him to meet me halfway and pay half the rent. He's not replied. My greatest concern is that he will leave his furniture in the flat which I don't necessarily require. Then I will have the cost of disposing of it. The flat is part furnished and he brought his own very large sofa, coffee table and dining table which they preferred to the ikea items I supplied. They asked if I would like to keep this furniture as they have nowhere to take it to and I don't really because they are all a little bit too large for the proportions of the flat and I don't think work very well, plus if my new tenant wants to bring their own stuff then I've got a problem!

Hmmm I guess it will all sort itself out.

Where are the tenants moving to? In with family or another private rental? If it's another private rental then how are they getting that rent/deposit together? What they are doing to you is one of the oldest tricks in the book.

I agree Msmamanature but not sure how I can stop them as by the time I've jumped through all the hoops the tenancy will be over anyway. They have said that their financial difficulties are such that they are moving to stay with friends until they're straight. I don't see that I've got much choice other than to keep my fingers crossed and take them to Small Claims Court to recover any expenses relating to unwanted furniture or damage. I don't think there is any damage though - they have lived in the flat for three years and it just needs an end of tenancy clean and poss lick of paint.

Some progress this week. Following a fairly terse email exchange my tenant has told me how disappointed they are with my attitude and that they will obtain a short term loan to pay the rent this coming week. I don't think there will be any issue with damages but I am more concerned he will leave me with all the furniture that he can't take with which will cost me a fair bit to get rid off if my next tenant doesn't want it.

One tip...Charities like the British Heart Foundation or DEBRA will do house clearances. They charge you depending on what they think they can resell. I dont know if they are any cheaper than a commercial operator, but at least you know the money is going to charity, and both those named above were efficient when I used them.

From working at a property management company and dealing with deposits, rent is the last thing to be taken from a deposit that is held with a scheme.

Firstly would be damages/replacements, cleaning, etc. Then any remaining deposit balance can be used for outstanding rent.

@c00k1e how are you getting your deposit back in instalments? That's not how a deposit scheme works.