Landlords, are you worried about rent arrears?

Do you have a rental property where the tenant is in rent arrears? Are you worried that your agent is not doing all they can to recover the rent or follow the legal process? Are you managing the property yourself and are unsure of what is legally required before you can start eviction proceedings? Not to worry, Cairn is on hand to assist with all your rental worries!

With the ‘Cost of Living Crisis’, more and more landlords are finding themselves in difficult situations where the tenant cannot afford to pay rent or is refusing to. The eviction ban is also impacting landlords leaving many feeling helpless with little options available to them.

So, what can you actually do?

Firstly, if the tenant is struggling to pay rent, you should try to work with them as much as possible to arrange a payment plan. Cairn currently provides an income and expenditure form to our tenants which allows them to work out their incomings and outgoings each month to establish what disposable income they have leftover for the repayment of debt. It is also important to make your tenant aware of all the additional help available to them, including contacting Citizens Advice, Universal Credit, the Scottish Welfare Fund, and the Discretionary Housing Payments through the Scottish Government.

If there is a Guarantor in place, make sure you contact them as they will also be responsible for the payment of rent per the terms of the tenancy agreement. Conducting inspections is also important, this allows you to establish that the tenant is still residing in the property and maintaining it to a reasonable standard.

If you have exhausted all avenues above and the tenant is still refusing to pay, unfortunately the only option left is to start eviction proceedings. With the current eviction ban, tenants must be in substantial rent arrears (6 months plus) for an eviction order to be granted. Landlords must firstly serve notice on the tenant to vacate and ensure they are complying with the governments ‘pre-action requirements’ for rent arrears.

What are ‘pre-action requirements?’

As a result of changes to legislation, any landlords applying to the First-tier Tribunal to evict their tenants for rent arrears need to be able to demonstrate that they have complied with pre-action requirements outlined by the Scottish Government. 

Before applying to the tribunal, a landlords must:

1. Provide to the tenant clear information relating to:

1. the terms of the tenancy agreement,
2. the amount of rent for which the tenant is in arrears,
3. the tenant’s rights in relation to proceedings for eviction (including the pre-action requirements set out in this regulation), and
4. how the tenant may access information and advice on financial support and debt management.

2. Make reasonable efforts to agree with the tenant a reasonable plan to make payments to the landlord of:

1. future payments of rent, and
2. the rent for which the tenant is in arrears.

3. Give reasonable consideration to:

1. any steps being taken by the tenant which may affect the ability of the tenant to make payment to the landlord of the rent arrears within a reasonable time,
2. the extent to which the tenant has complied with the terms of any payment plan agreed, and
3. any changes to the tenant’s circumstances which are likely to impact on the extent to which the tenant complies with the terms of any payment plan agreed.

Cairn currently has a strict rent arrears process in place which includes template letters for staff to send to tenants, complying with the above legislation.

What happens at the end of the notice period?

If the tenant does not vacate the property, you will be required to apply to the Housing and Property Chamber, First-tier Tribunal for Scotland for an eviction order.

This involves completing application paperwork, providing evidence of the eviction ground and also demonstrating that you have complied with the pre-action requirements. Before submitting the application, you will also need to issue a section 11 notice to the local authority. During the application, the landlord / representative will also need to attend one or more case management discussions with the Tribunal before any order is granted.

It is important that landlords have a strong case at the Tribunal as legal members are required to now conduct a ‘reasonableness’ test on the tenants and landlords’ circumstances before granting or rejecting eviction applications. This process can be very time-consuming and complicated, especially if defended by the tenant, landlords can defend themselves at hearing, but many do employ the services of a lawyer to act on their behalf.

Landlords can also apply to the Tribunal for an ‘order of payment’ for the debt owed by the tenant. Again, this involves submitting application paperwork along with the required evidence and attendance at one or more case management discussions.

At Cairn, we have an in house Compliance Manager on hand to assist landlords with eviction and civil applications at the Tribunal. Should you wish advice or more information on this service please email enquiries@cairnletting.com