COVID-19: How to collect rent arrears - Cobra Financial Solutions Ltd

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Despite the ongoing pandemic, it remains a fact that tenants are legally obligated to pay rent. But what do you do if your tenant refuses to pay their rent during these troubling times? And how can you recover rent arrears?

This week, the team here at Cobra Financial Solutions have made sense of the latest government advice for commercial and private landlords to bring you all the answers you will need.

Can my tenant use coronavirus as an excuse? state, ‘the COVID-19 outbreak will not affect tenants’ ability to pay rent.’ The government’s strong package of financial support will ensure that (in most cases) tenants should be able to continue to pay their rent as normal.

With a £9.3 billion boost to the welfare system, an extension to The Coronavirus Job Retention Scheme, and local authority hardship funding available to those experiencing financial difficulties, the government believe that in the majority of cases, tenants should be able to continue paying rent and abide by all other tenancy agreement terms.

I have corporate tenants who will not pay – what can I do?

Although businesses cannot currently be evicted from premises, landlords can still peruse any monies owed. You may also be able to issue insolvency, or winding up proceedings, or even instigate the commercial rent arrears recovery procedure, therefore seizing on-site goods in order to recover the unpaid rent. Finally, remember to consider what interest is payable on the unpaid rent, as you may be able to take action to recover lost monies.

Legal advice can help you understand the options available to you. Each case will have its own unique circumstances, and it is worth understanding how the pandemic may affect you legally.

Should I offer a repayment support package?

If your tenant is struggling to pay their rent, then they should have communicated this to you. The government are advising landlords to support tenants who are experiencing difficulty, either by accepting a lower level of rent or agreeing to a delay of rent arrears payments. Any agreed plan must, however, suit both parties. Landlords do not have to accept concessions.

Can mediation be beneficial?

If the dispute is ongoing, then you may wish to consider mediation. If successful, mediation can avoid the need for court action, which may be a lengthy and costly process. Conducted by an independent third party, a mediator will aim to help landlord and tenant reach an agreement, although no assurances can be offered. But with an average UK price tag of £100 per hour, mediators are not a cheap option.

Can I begin possession proceedings?

The Coronavirus Act 2020 protects social and private tenants by delaying when landlords can proceed to evict tenants. So in short, unless the case is deemed serious, or you have given your tenants a minimum of 6 months’ notice, you cannot begin possession proceedings. However, if your tenant has accrued rent arrears to the value of over 6 months’ rent, then you may proceed. In these circumstances, landlords can progress their case through the courts, where only the most critical and serious cases will be prioritised.

Can I serve an eviction notice?

Yes. From the 11th of January 2021, you may serve an eviction notice. So from the 25th January, evictions can be legally enforced.

How Cobra can help you

We can visit your tenant to ensure you get your money back in your pocket: where it belongs.

With over 75 years’ combined experience in the debt recovery industry, we know how to collect rent arrears. Our dedicated team can advise you on the best course of action for your case, and we will take the fastest and swiftest action needed to recover your money. From letters, to court orders and eviction notices – we do all the hard work. Our expert team can manage the whole process for you.

So choose the stress-free way to deal with troublesome tenants.

To discuss your case with a member of the team today, contact Cobra on 0151 526 4222.

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