With effect from 1 October 2015, the minimum figure for serving a Statutory Demand (and for the subsequent presentation of a bankruptcy petition) against an individual is £5,000.00. Before 1 October 2015 the figure was as low as £750.00 (and that figure still remains in respect of debts owed by companies). Historically, using a Statutory Demand has often been an effective way of getting rent paid. What are the options now for a Landlord to collect rent from an individual Tenant in arrears:-
- Suing in the County Court (time consuming and inconvenient and far more expensive than a Statutory Demand).
- CRAR - however commercial rent arrears recovery is only available for recovery of rent, VAT and interest. It does not allow a Landlord to recover service charges or any other debts due under the Lease. It also only applies to commercial lettings and won't assist a Landlord of a residential Tenant.
Rent Deposits The most practical way to deal with this is for a Landlord to insist on a rent deposit of at least £5,000.00 when dealing with an individual Tenant. This should also be a consideration that a Landlord takes into account when a Tenant requests consent to assign. If the assignment is to an individual then consider a rent deposit from the incoming Tenant for £5,000.00. Otherwise, individual Tenants may escape rental liabilities of less than £5000 on the basis that the Landlord will not want the expense and inconvenience of bringing a small claims action through the Court. For more information on this particular topic or in fact in relation to any concern arising out of a Landlord and Tenant relationship/property issue please do not hesitate to contact our Liz Shaw on 0114 2442041, 07989 44442771 or email [email protected].
