Private Finance Agreements

[cassa333]

Hi,

I am after a bit of advice biut not sure if this should be here or in finance.

I have a tenant (well documented) that I am in the process of getting a private agreement for repayment of the arrears. There is a clause that states that if they miss a payment or make a late payment WITH my agreement there will be a £25 charge. There is also a clause that if, for whatever legal reason they get notice to quit, they give notice to quit or they abandon the property the agreement becomes void and the remaining arrears become payable in full. Another clause is that if they miss a arrears repayment or are late without my agreement the agreement is void.

There is also a similar clause in the tenancy agreement that WITH my agreement late or missed rent payments there will be a £25 charge.

They are saying that I cannot make the same charge on both agreements as they would in effect be charged twice for the same non payment.

I see the agreements as separate and that the charges can be made.

Is anyone able to advice please.

Thank you
Cassa

[Buenchico]

We could do with Barmaid's help here but my own view is that the tenant is correct.

The Office of Fair Trading guidance states "It is unfair to impose excessive sanctions for a breach of contract. A term that requires the tenant to pay more in compensation for a breach than a reasonable pre-estimate of the loss caused to the landlord is likely to be void as a penalty under common law":
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284440/oft356.pdf

i.e. the penalty charge specified in the tenancy agreement should not be more than your costs involved in (say) sending a reminder letter, together with your (very small) loss of income through not being able to put the money into your bank and get interest on it. So even your original £25 penalty charge could be open to challenge as being excessive (and therefore invalid in law). Since you would not suffer any additional losses through a late rent payment after the second contract document has come into force, it's hard to see how any further charge could be held to be valid in law.

[bednobs]

also common sense tells you that people who are behind on hteir rent aren't very likely to be able to afoord one charge, let alone 2!

[woofgang]

are they paying the arrears payment separately from the rent payment or together?

[Peter Pedant]

\i would get rid of them

They are obviously planning not to pay

all my late payment agreements have been on the lines of £100/month
and none of them were paid off ( I ended up evicting )

[woofgang]

must admit i agree with PP, take the lesson and cut your losses.

[Peter Pedant]

to clarify : most of my repayment schemes are one sentence

to wit : I undertake to pay off arrears at £100 / mo

and none have been honoured - for the reason above - if they dont have the moolah for the rent then they dont have money for the arrears

think - nettle/grasp

think of another way - you are gonna have to take a loss - is it now or later ?

[cassa333]

OK Thanks. Perhaps I shall amend it down to £15 or something. The late payment is only for agreed late payments. Any not agreed or they just don't pay the arrears and the remaining amount becomes payable in full.

In reality it is I suppose an incentive to pay the arrears as agreed. They could just walk away and not pay any arrears and not leave without an eviction and I am resigned for but wanted to try at least to mitigate the almost £6k loss.

However they are procrastinating about signing any new agreements and have stopped contact, friends visiting them is far more important than the security of their long term accommodation needs.

I will have to contact them and remind them the section 8 notice means their tenancy ends on 20th Sept but I don't think they will go easily or quickly.

What forms or where do I go to get a court order for an eviction please?

When they have finally gone I shall get an agent to look after the place. I just can't cope with this :(