What does rent arrears mean?
Rent arrears is a term used to describe the outstanding money owed to a private landlord, housing association or local authority. If you do not pay your rent – a priority debt – on time, you risk eviction from your property.
Rent arrears during Coronavirus
There are rules in place to protect tenants during the Coronavirus outbreak. Landlords may be keen to earn more as their income is affected by Coronavirus, so they may seek to alter your contract as a result. You need to agree to any changes to your tenancy or have a prior agreement/review in place for this to take effect, so be sure to read your contract carefully if you are asked to increase payments.
If you are struggling to pay your rent, you can ask your landlord to pause payments. However, they must agree to this. Renters do not apply for payment holiday breaks but some landlords do, it will be worth asking to see if you can pause your payments if needed.
What happens if you have rent arrears?
Renting is a common expenditure for many people, but not keeping up with the repayments can come with consequences that many of us don’t consider when signing up to a contract. Whether you rent your house privately, through a housing association or through the local authority, if you are unable to pay your rent, you risk losing the roof over your head.
If you fall into rent arrears, you will be chased for money and asked to pay additional fines as a result. You may also have your renting contract cancelled and be told to leave the property you are inhabiting. This is also known as eviction.
How do you deal with rent arrears?Sorting out your arrears quickly could put you at less financial risk in the future, but acting quickly is important. If you do find you are struggling to pay your rent, you will need to get in contact with your landlord. Many people find this difficult, but there are steps you can take to make the situation easier:
- Contact your landlord and explain your situation – is you not paying your rent a temporary problem or are you going to struggle long-term?
- How much rent arrears are owed? You might want to complete an Income & Expenditure sheet to show exactly what your financial situation is. Completing an income and expenditure will allow you to:
- Add up your total monthly income.
- Add up your total outgoings, including (but not limited to) essential household expenses, utilities, transport, food and TV licence etc.
- Take your total outgoings away from your total income. This will show your landlord how much surplus (or spare) income you have, which can then be used towards repaying your rent arrears.
Remember, your rent is a priority outgoing compared to repayments needed for things like unsecured loans, credit cards, catalogues etc. There is no point prioritising your unsecured debts if it means you lose the roof over your head.
Can I move house if I have rent arrears?
If you cannot pay back previous rent arrears then you may face difficulties moving into a new property. Some landlords, letting agents or council authorities may not grant your renting application if you have outstanding rent arrears, so it may be best to clear these first if possible.
Does having rent arrears affect my credit score?
Rent arrears will not affect your credit score until your landlord submits a court case against you. Therefore, it’s worth budgeting where possible to pay your rent in full and on time, and speaking to your landlord before it gets to a court summons. If your credit score is affected as a result of rent arrears, this will affect your ability to borrow credit at a competitive rate of interest in the future.
Am I entitled to any benefits?Check if you are entitled to any benefits, as this may help with paying the arrears. You can contact the welfare benefits advisor at your local Citizen’s Advice or check your entitlement at www.turn2us.org.uk
If you’re already getting benefits such as Universal Credit or Housing Benefit, check you are getting the right amount. If you get Universal Credit or other benefits, you can ask for part of these payments to be paid towards your rent arrears.If you get a Housing Benefit or Universal Credit you may also be able to get a Discretionary Housing Payment (DHP) if you can’t pay your rent. A Discretionary Housing Payment is an extra payment from your local authority designed to help cover outstanding costs.
What happens if my landlord wants to evict me?
There is a process your landlord needs to follow if he or she wants to evict you. They will have to serve you a Section 8 or a Section 21 notice, and either option will give you time to leave the property if a resolution cannot be agreed.
Section 8 notice
If you have broken the terms of your tenancy, you will receive a Section 8 notice, also known as a notice to quit. This gives your landlord grounds for possession and the most common reason for this would be if you are in rent arrears – you will have at least 2 months of arrears in this case. The notice can be 2 weeks or 2 months, depending on the grounds for the notice being served.
Section 21 notice
This notice is applied to evict you after a fixed term tenancy ends or during a tenancy which has no specific end date. A landlord must give you a minimum of 2 months’ notice in writing and if you don’t leave the property on the date that the notice specifies, your landlord will need to take you to court to gain a possession order.
What happens if I am taken to court over my rent arrears?
This will be your chance to explain to the judge the reason for your debts and explain any proposal to repay the arrears. The most important thing is for you to attend the court hearing as this will benefit your case more than if you didn’t turn up at all.
The judge will make a decision on the outcome of the hearing. He/she may:
- Dismiss the case – This is likely if there is no reason for you to be evicted, your landlord has not followed the correct procedure, or your landlord hasn’t attended the hearing.
- Adjourn the hearing – Your hearing will be moved to another date if a decision cannot be made on the day.
- Grant an order – The Judge decides which order should be granted.
It is very important to note that if you are being taken to court over your rent arrears, you need to complete an income and expenditure form to prove to the court what available surplus income you have to offer towards the arrears.
Your offer needs to be something that is affordable and sustainable, so you’re not overstretching yourself in order to pay the arrears. If you make it unsustainable, it will be very difficult to persuade the court that you can stick to a second arrangement if you haven’t stuck to the previous one.
What is a Possession Order?
If a possession order is granted against you, you will be given a specific date to leave the property you’ve been living in – this is either 14 or 28 days from the date the possession order was granted. If you do not leave the property by that date, the court can grant a bailiff a warrant for possession to evict you on a certain date.
What is a Suspended Possession Order?
If you are handed a suspended possession order, the judge has allowed you to stay living in your rented property, providing that you make the payments offered on time, or adhere to any conditions set by the court. However, if you don’t adhere to the terms of the order, the landlord will be able to evict you.
What happens if I can’t pay my rent arrears?
If you cannot pay your rent arrears after seeking help and benefits, you should take the time to look through your budget and ask for advice at your local Citizen’s Advice Bureau. You can also get in touch with Shelter, who are experts in helping people with housing issues.
You can also contact our Advice Team on 0800 280 2816 if you are unable to mange your debts and face eviction as a result.