Late Payment Rent Agreement Templates

							 Property Possession &
Mortgage Repossession for
       Landlords



                   Inside Housing Solutions Ltd
South Barn, Cowix Farm, Capel Road, Rusper, West Sussex RH12 4PY
                         Tel: 01293 871107
                info@insidehousingsolutions.com



                                Inside Housing Solutions Ltd
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                          Inside Housing Solutions Ltd
Ending a Tenancy




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 Termination of the Tenancy by the
              Tenant
• Termination of a fixed term Tenancy before end
  of fixed term
  – Only with LL‟s agreement
  – If this is allowed for by a break clause in the Tenancy
    Agreement & the Tenant has followed any
    requirements for giving notice specified in the
    Tenancy Agreement
• If agreement does not allow Tenant to terminate
  early & LL does not agree, the Tenant will be
  contractually required to pay the rent for the
  entire length of the fixed term

                              Inside Housing Solutions Ltd
Termination of the Tenancy by the
             Tenant
• Termination of a periodic Tenancy
  – Notice in writing
  – Give at least one month‟s notice
  – Notice must expire at the end of a period of
    the tenancy i.e. Tenancy started on 20th of a
    month – end of a period of the tenancy = 19th
    of a month



                         Inside Housing Solutions Ltd
Termination of the Tenancy by the
             Tenant
• The only date in a Tenancy that a Tenant
  may leave without giving any notice is on
  the expiry date of the a fixed term tenancy
• I.e. Tenancy granted on 1st January 2007
  for a fixed term on 6 months. Fixed term
  expires 30th June 2007



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    Possession by the Landlord
The law makes it an offence for a landlord to:

• commit acts likely to interfere with the peace or comfort
  of a tenant or anyone living with them
• persistently withdraw or withhold services for which the
  tenant has a reasonable need to live in the premises as
  their home
• make a tenant leave their home, or stop using part of it
• do anything that stops a tenant doing the things they
  could normally expect to do
• take someone's home away from him or her unlawfully



                               Inside Housing Solutions Ltd
   Possession by the Landlord
• 1st stage – notice
  – Section 21 or
  – Section 8
• 2nd stage – possession proceedings
  – Accelerated
  – Fixed date
• 3rd stage - bailiffs


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             Section 21 Notice
• Must be in writing
• Must state that possession is required under S.21 of the
  Housing Act 1988
• Must have a notice period of at least 2 months
• If the fixed term has not expired, the notice must not
  expire before the end of the fixed term
• If the tenancy is periodic, the notice period must be at
  least two months and end on the last day of a period of
  the tenancy
• Remains valid until a new Tenancy Agreement is issued
• Example of a S.21 Notice:
  http://www.oyezformslink.co.uk/forms/templates/01055.p
  df

                              Inside Housing Solutions Ltd
          Section 21 Notice
• For example:
  – The fixed term ended on 11th June 2007 &
    rent is paid monthly. The new rental period
    (periodic tenancy) will run from 12th of the
    month to the 11th of the following month. Any
    S.21 notice must expire on the 11th of the
    month.
  – The LL decides on 20th July 2007 that s/he
    wishes to issue a S.21 notice. This notice
    should expire on 11th October 2007 to satisfy
    the two month notice requirement.
                         Inside Housing Solutions Ltd
            Section 21 Route
• Requirements for an order of possession under
  Section 21 are:
  – That the tenancy is an AST
  – That any fixed term of the Tenancy has expired
  – That a notice properly drafted has been served on the
    Tenant
  – That the proper notice period was given to the Tenant
    and has expired at the time proceedings are issued
  – Written Tenancy Agreement
• „Accelerated possession procedure‟
• Judge cannot refuse to make order
                            Inside Housing Solutions Ltd
           Section 8 Notice
• Used for all other grounds for possession
• Mostly used for rent arrears claims
• Notice must be in prescribed form or it will
  be invalid
• Notice has a life of one year
• Discretionary & mandatory grounds
• Will require a court hearing if Tenant
  remains after notice period expires
                        Inside Housing Solutions Ltd
Section 8 Grounds for Possession
• Mandatory
  – Ground 1 – LL requires property to live in as his/her
    main home
  – Ground 2 – Mortgage company requires possession
    of the property
  – Ground 3 – Holiday lets
  – Ground 4 – Educational establishment lets
  – Ground 5 – Property required for a minister of religion
  – Ground 6 – Property is to be redeveloped
  – Ground 7 – Tenant has died and no rights of
    succession

                             Inside Housing Solutions Ltd
Section 8 Grounds for Possession
• Ground 8 - Mandatory
  – The Tenant owed at least 2 months‟ rent if the
    Tenancy is on a monthly basis or 8 weeks‟
    rent if it is on a weekly basis, both when the
    Landlord gave notice seeking possession and
    at the date of the court hearing




                         Inside Housing Solutions Ltd
 Section 8 Grounds for Possession
• Discretionary (9 in total)
   – Ground 10 – the Tenant was behind with his rent both
     when the Landlord served notice seeking possession
     & when he began court proceedings
   – Ground 11 – even if the Tenant was not behind with
     his rent when the Landlord started possession
     proceedings, the Tenant has been persistently late in
     paying his rent
   – Ground 12 – Tenant has broken a term of the
     Tenancy Agreement (not rent)
   – Ground 13 – Condition of property has got worse
   – Ground 14 – Anti-social behaviour
   – Ground 15 – Condition of furniture

                               Inside Housing Solutions Ltd
     Section 8 Notice Periods
• For grounds 3,4,8,10,11,12,13,15 or 17 – at
  least 2 weeks
• For grounds 1,2,5,6,7,9 or 16 – at least 2
  months
• For ground 14 – possession proceedings can
  commence as soon as the Landlord has served
  the notice
• Periodic tenancies = notice period must end on
  the last day of a rent period
• Example of a S.8 Notice:
  http://www.oyezformslink.co.uk/forms/templates/
  01095.pdf
                         Inside Housing Solutions Ltd
          Possession Orders
• A possession order will specify a date when the
  Tenant must give up possession
• Suspended possession orders may be made &
  based on terms
• Fixed date claims may also include a money
  judgement for arrears
• Rent arrears claims will also include an
  “occupation rent”
• Orders for costs
• Date for payment of any money award

                         Inside Housing Solutions Ltd
       How Long Will It Take?
• Accelerated – about 8 – 12 weeks from sending
  the forms off, if all goes well
• Standard procedure – case will be listed for
  hearing between 4 & 8 weeks after issue
• Tenant will be given between 14 days & 6 weeks
  to vacate (assuming a mandatory ground used)
• If bailiffs are required, allow another 3 – 8 weeks
• Remember locksmith!


                           Inside Housing Solutions Ltd
Mortgage Repossessions




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        What‟s the problem?
• “I am writing to you regarding the arrears
  on your mortgage account”
• CML figures show c. 2,000 buy to let
  properties repossessed in Q1 of 2009
• 218 BTL products available – July 2009
• 3500 BTL products available – July 2007
• 312,000 mortgages in arrears – June 2009

                      Inside Housing Solutions Ltd
            Legal Points
• Can people with mortgages legally
  grant a tenancy?
• What about Buy-to-Let mortgages?
• What does “binding on the lender”
  mean?
• Are there any other circumstances
  when the tenancy will be binding on the
  lender?

                     Inside Housing Solutions Ltd
      Road to Repossession
1. Mortgage account falls into arrears
2. Lender passes account to Solicitors
3. Solicitors ask court to issue a
   Possession claim
4. Court issues the Claim
   Hearing usually 4 – 10 weeks from issue
   of claim
5. Before the Court hearing
                      Inside Housing Solutions Ltd
    Road to Repossession (2)
6. The Court Hearing
7. After the Hearing
8. Breach or expiry of a Possession Order
    “Warrant of Eviction”
9. Application to suspend the Warrant
10. Eviction


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        Possession Orders
• 28 day possession order

• Suspended possession order

• 56 day possession order




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          After Repossession
          (Tenants position)
•   Tenancy not binding
•   Tenancy Binding
    Tenancy type
    Lender has accepted rent from tenant
    Buy-to-Let mortgage
    Lender has given permission
    Tenancy commenced prior to mortgage
•   Tenant buys property

                     Inside Housing Solutions Ltd
         After Repossession
         (Landlords position)
• Ownership of property
• Further expense for you
  Interest
  Estate Agent / Auction fees
  Legal costs
  Much reduced value
  Tenant compensation
• Shortfall Debt

                      Inside Housing Solutions Ltd
     Struggling to pay mortgage
          What can I do?
• Speak to the lender
  Capitalise the arrears
  Convert capital repayment to interest only
  Ask Lender to accept lower payments
  Ask for a payment holiday
  Re-mortgage
• Speak to the tenant

                       Inside Housing Solutions Ltd
Rent Increases




       Inside Housing Solutions Ltd
           Raising the Rent
• There are 3 basic ways to increase the
  rent in an AST
  – By way of a rent review clause in the Tenancy
    Agreement
  – By agreement with the Tenant
  – By notice under Section 13 of the Housing Act
    1988



                        Inside Housing Solutions Ltd
        Rent Review Clause
• Can be used in Fixed Term & after Fixed
  Term has ended
• Must comply with the provisions of the
  “Unfair Terms”
• Increase must be referable to someone or
  something independent, such as the retail
  price index
• Clauses allowing the Landlord to increase
  the rent as s/he sees fit will be void
                      Inside Housing Solutions Ltd
  Rent Increase by Agreement
• Issue of a new fixed term Tenancy
  Agreement giving the new rent
• L/L can also increase the rent by getting
  the Tenant to sign a document suggesting
  the new rent – if they fail to return the
  letter or to pay the increase the rent will
  not have been validly increased


                       Inside Housing Solutions Ltd
      Notice under Section 13
• Formal procedure to propose a rent increase
• Special form
• At least one months notice must be given
• If the Tenant does nothing in this period, the
  increase will be valid
• If the Tenant feels the increase is too high s/he
  can refer it to the Rent Assessment Committee
  for review (by last day of rent period)
• Rent Assessment Committee can substitute
  what they consider is a market rent for the rent
  proposed (not always in Tenant‟s favour)
                           Inside Housing Solutions Ltd
     Notice under Section 13
• S.13 can only be used after fixed term
  expiry & can only be used once every 12
  months
• Example S.13 Notice
http://www.oyezformslink.co.uk/forms/templa
  tes/01036.pdf



                      Inside Housing Solutions Ltd
 Property Possession &
Mortgage Repossession for
       Landlords



                   Inside Housing Solutions Ltd
South Barn, Cowix Farm, Capel Road, Rusper, West Sussex RH12 4PY
                         Tel: 01293 871107
                info@insidehousingsolutions.com



                                Inside Housing Solutions Ltd