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When is a tenant 8 weeks in arrears?

You may be wondering why this question is relevant or important. If so, bear with me whilst I enlighten you. A tribunal decision in Coventry is set to shake the current practice of councils paying housing benefit to claimant tenants 4-weeks in arrears. Landlords who have such tenants … take note.

The Housing Act 1988, Section 8 (as amended by Section 151 of the Housing Act 1996) states that a landlord can serve notice on the tenant to seek possession of a property let on an assured tenancy on grounds of rent arrears, if at least eight weeks rent is unpaid, where the rent is payable weekly or fortnightly, or at least two months rent is unpaid if rent is payable monthly”.

Tenancy agreements normally stipulate that rent must be paid weekly or monthly in advance. So tenants are expected to pay rent in advance of the period for which the rent is applicable.That is the liability to pay rent. For example, if rent is due on 1st of each month, and the tenant doesn’t pay rent due on 1st Sept and 1st October, then on 2nd October, the tenant already has 2 months rent unpaid, and the landlord can serve notice seeking possession.

The complication arises where a tenant is receiving housing benefit, which councils tend to pay 4 weekly in arrears. So, in the example above, tenant was due to pay rent on 1st September, but didn’t get housing benefit until 28th September. Tenant decides not to pay the landlord anyway, and spends it on something else. On 2nd october tenant has two months rent unpaid. On 3rd October, Landlord informs council housing benefit office and requests direct payment, but council insist that tenant is not yet 8 weeks in arrears because 8 weeks of actual time has not elapsed from 1st September to 2nd October even though contractually, tenant is more than 8 weeks in arrears. So, council refuse to pay next lot of housing benefit to landlord, as the law requires them to do. But don’t blame the council, its the same government that wrote the law that then gave the guidelines that “DWP takes the view that a person cannot be in rent arrears in respect of a period that has not yet been served”. Completely ignoring the contractual obligations that the “person” signed with the landlord.

So, the Guild or Residential Landlords, on behalf of one Landlord, Mr Doncaster decided to take Coventry City Council to court to challenge their decision, and the Tribunal Judge, CJ Jones ruled in his favour.
He said: “In making this decision I have considered the Housing Benefit Local Housing Allowance Guidance Manual as amended in March 2008 and in particular the note at the foot of 6.86 – 6.89 that rent cannot be in arrear in respect of a period that has not been served.
I do not agree with that view. Rent is in arrears once the contractual date for payment has passed irrespective of whether rent is due in advance or in arrear. Regulation 95 of the 2006 Regulations refers to a liability to pay rent and the liability in this case is to pay rent in advance.

Hurray, Hallelujah. At last, someone with clout has pointed out the obvious, something landlords have been saying for yonks and which has fallen on deaf government/council ears.

This judgement has serious implications for all landlords who have tenants in receipt of housing benefits or local housing allowance as it is now called. Maybe common sense will now prevail.
See full story here.

I have already written to one council about problems with a current tenant, and asked what steps they were now going to take in view of this judgement – I got a reply-the usual official jargon, but no answer to the question. So, I’m sending another letter on Monday asking the same question. Watch this space.

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    5 Responses

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    1. Mark says

      Although you might have some great tenants in your property, there is no way to predict whether or not they will end up in rent arrears. If you are a landlord, then having a tenant in rent arrears can cause real problems, both financially and legally. Although you probably would prefer to let the tenant stay, without the income from rent you might need to eventually seek eviction. If your tenant has fallen into serious rent arrears and is unable to pay you the money you need, then it might be time to think about tenant eviction. Although tenant eviction can be a long and painful process, if your tenant is living in your property without paying rent then eviction is necessary. However, you need to make sure that you follow all eviction procedures laid out by the government exactly. Failure to do so will prolong the eviction process, and also damage your changes of receiving the rent arrears that you are owed. However, if you follow the law precisely and the rent arrears problem is serious enough, eviction shouldn't be too much of a problem. Once you have successfully evicted the tenant, then you can start looking for a new tenant who can pay the rent on time and stop you from losing money due to Tenant Arrears.

    2. Larry says

      Landlords have a right to evict tenants if the tenant has become a nuisance to the property as long as the agreement includes a nuisance clause. A nuisance could be someone who throws loud parties every night or who continuously disturbs the neighbors, resulting in police visits to the property. In this case, tenants have a right to use and occupy a rental unit in any way they want as long as it does not infringe on the quiet enjoyment of other tenants in the building or violate federal, state, and local laws.

      You will need to check the laws in your area to see what the proper statutes are for the eviction process. In my location you can file immediately, however I know in other areas you have to wait 45 days. Check with your local county courthouse or housing department.

    3. shaz says

      Hi.Our tenant is 8wks in arrears.despite asking them so many times,they have’nt paid us yet.Problem is we had to evict them.They have moved out from our property now as we had to move in to our property.Can somebody advise us or please help us on how to get those arrears..or maybe who to contact or talk to in order to get the arrears even though they are no longer in our property..Please help us.We are desperate as it’s a lot of money they owe..

    4. Torey Butterworth says

      As a landlord can you change payment direct to you if rent isn’t paid for 1 month without notifying the tennant?

    5. Nasher says

      I have just rang coventry council benefits and they insist that the tenant has to be 8 weeks in arrears. Housing benefits pays them every 2 weeks and if fail to pay me that money 4 times (hence the 8 weeks) only then will they pay me directly. My contract clearly states that they have to pay 8 weeks IN ADVANCE, so they will be in arrears by 16 weeks before I get paid directly.

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