How to collect your rent during the pandemic

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See Commercial Rent Arrears Recovery or Forfeiture of Lease.

What can residential landlords and commercial landlords do to collect outstanding rent during the pandemic restrictions?

With the government restrictions in place for both residential and commercial landlords we look at what options are available and how effective they are.

Residential Landlords

For residential landlords the biggest threat in their arsenal to persuade tenants to keep on track is the threat of eviction. Whilst section 8 notices can still be served the threshold has gone up and everyone know evictions are banned. This then becomes an empty threat and without any immediate consequences.

Therefore, some tenants decide to take their chances pleading their case in court a year or more down the line then enter a form of insolvency. Landlords eventually gain a judgment in their favour and hope that the bailiffs or a High Court Enforcement Officer can recover £20K of rent arrears plus costs and bailiff fees from the goods in someone’s house. Whilst not impossible it presents a challenge in the average home.

Commercial Landlords

Commercial landlords generally used three methods for enforcing their rent arrears as well as of course falling back on the rent deposit. These were:

• Commercial Rent Arrears Recovery (CRAR) if 7 days or more were owed.
• Forfeiture of Lease
• Statutory Demand or Winding up Petition.

Currently the three methods are almost impossible to use.

• Commercial Rent Arrears Recovery (CRAR) always had certain limitations. Its main quality was that it was free and very quick. Since March 2020 we have seen the number of days the rent must be outstanding steadily increased to 457 and 554.
• Forfeiture of Lease for rent arrears is currently banned until 30th June 2021.
• The use of a Statutory Demand or Winding up Petition for rent arrears has in effect also been banned.

What can landlords still do to recover Rent Arrears?

The government has not taken your rights away to use a debt collector, or solicitors to chase the tenant, or indeed gain a judgment in the county court.

Once you have a judgment if it is for over £600 then it can be transferred up to the High Court for enforcement by a High Court Enforcement Officer.

Though there was a short ban on enforcement that has now ended. Since 23 August 2020, we are now able to visit to take control of goods at all properties, residential and commercial. We are also able to take control of vehicles on the Highway again.

We are not allowed to enter residential properties at the moment which creates a challenge but at least your debt is being pursued and a writ has been issued which puts you first in the queue when the debtor owes others.

Conclusion

When the pandemic is finally over there will thousands of people looking to recover money owed to them.

Year on year the amount of county court judgments keeps goes up until 2020 when there was a 50% drop.

This can only be because the courts system is backlogged, or people are holding off issuing claims.

There will be a tsunami of claims and the way the writ system works those that get the writ issued first have first claim on any available money.

If you don’t want to be at the back of the queue get your claim issued ASAP.

How do I instruct you?

Read about our High Court Enforcement service

I have a question

Telephone or email Frank G Whitworth for advice.