Tenant arrears and bankruptcy

Recently there has been a dramatic increase in the growth and popularity of the rental market. One of the most popular topics is individual debt and the reasons for falling into debt, be it entering the vicious circle of short-term loans, bad debt prioritisation or even wilful default. Landlords should foresee that there may be times when tenants cannot pay their rent and should be practical in their approach to this issue.

This section considers the options available to a landlord if tenants fail to pay their rent and how these rights differ when tenants become insolvent.

This section is maintained by Winston Jacob, Barrister at Lamb Chambers.

Coronavirus update

 

The coronavirus pandemic and the resulting action taken by the government to attempt to mitigate its effects has had a significant effect on landlords’ ability to deal with rent arrears. Due to the negative impact on the economy and loss of income/jobs, many tenants are likely to be unable to pay all or part of their rent. Therefore, landlords are more likely to see tenants falling into rent arrears.

 

However, the impact of coronavirus and measures taken to cope with it have also had both legal and practical effects on the remedies available to landlords and how they may enforce them. The legal impact has taken effect primarily through amendments/additions to the Civil Procedure Rules 1998 (CPR) and the Coronavirus Act 2020. The effect of coronavirus will be address throughout this section where relevant to the individual topics discussed.

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