Landlords and their agents often breathe a collective sigh of relief following a successful court hearing for a possession claim. The hearing often represents the apex of many months of preparation and relief that the tenants, in contravention of their agreed obligations, will finally be ordered to leave and make good their breaches. However relief at this stage is premature. Tenants, even if they remain after the date a court orders them to leave, still have rights and there is a further process to embark upon to remove the tenant and pursue them for their debts.
Firstly evictions of tenants in England and Wales can only be carried out either by county court bailiffs or, if proceedings are in the High Court, high court sheriffs. The warrant can only be applied for once the date for possession on a court order has passed. Bailiffs will then attend the property to evict tenants and in most cases are successful in doing so, although police officers and further court proceedings for contempt of court can be necessary.
If you have a money judgment against a tenant who subsequently fails to pay what is ordered, you have three options:
1. Pursue your former tenant(s) for the monies owed. However, further costs, delays and court proceedings may not be a viable option.
2. Drop the matter entirely and write off the lost monies against your tax liabilities.
3. Wait for a few months before doing anything. Your judgment remains valid for the next 6 years and the financial status of the former tenant(s) may change in that time.
Pursuing debts in England and Wales are inherently difficult and this should be borne in mind before undertaking the time and further costs incurred in pursuing the debtor. The first step is to find a forwarding address for the tenant. If the tenant has left no forwarding address then enquiry agents can be instructed to ascertain their whereabouts.
Once a forwarding address has been obtained the following enforcement options are available:
An attachment of Earnings:
Apply to the court for an order permitting the regular deductions from the debtors monthly/weekly wage.
Third Party Debt Order:
Apply to the court for an order which permits the release of funds by a third party. The third party is usually a bank or building society.
This option is only available if the Debtor has property and usually ideal where you have a Guarantor. The charge does not extract money from the Debtor or the Guarantor but secures the debt against property which is then discharged when the property is sold, just like a mortgage.
The Bailiff or Sheriff is instructed to attend the Debtor’s home and seize goods if the Debtor does not agree to pay the debt or enter into a dialogue with regards to a payment plan.
Sometimes debtors are prepared to make a single lump sum part payment in full and final settlement of the outstanding debt which may be more economic than accepting small instalments over a lengthy period.
Given the inherent problems with recovery, it is in the landlord’s best interest to obtain a guarantor where possible to maximise the chances of recovery. Where a guarantor is not a possible option then landlords are advised that taking a commercial view on recovery can be the most pragmatic and cost effective option.