There is an online portal called “Money Claims Online” which allows you to make a claim in the Small Claims Court for money owed to you. This system can be used by Landlords if they wish to make a claim against former tenants and/or guarantors for unpaid rent after the tenancy has ended. This process can be used by Landlords after they have regained possession of the property and after the deposit has been dealt with.
Before starting the Claim
Before starting this procedure you should send a letter to the tenants/guarantor in accordance with rules set out in what is known as the “pre-action protocol”. This pre-action protocol letter should include:
- The basis on which the claim is made.
- A summary of the facts
- An explanation of how the amount claimed has been calculated
- Relevant evidence including a copy of the tenancy agreement and evidence of the outstanding rent
- Details of how the debt can be paid and details of how to proceed if the tenant wishes to discuss payment options
You should give the former tenants/guarantors a period of at least 30 days to respond to the pre-action protocol letter. The pre-action protocol letter should be sent by post and by email if allowed by the tenancy agreement. If the tenants do not respond to this then you can initiate the claim process using Money Claims Online. You should however be aware that this process will likely be time consuming, especially if mistakes are made or if the Tenant defends the claim.
Starting the Claim
When completing the Money Claims Online application, you will again need to provide a concise summary of the facts, including when the Tenancy was entered into, the outstanding rent, dates of non-payment and how any interest on rent was calculated.
There will be a Court fee payable which will be calculated based on the value of the claim. You will need to upload evidence. This should include evidence showing that you are the legal Landlord, a copy of the signed tenancy agreement and evidence of the missed rent. The Claim will be allocated a claim number which must be quoted in all correspondence with the Court.
The Court will send the application to the Defendants (former tenants) and the Defendant will be given various options. They will be able to:
- pay the outstanding debt
- defend the claim / make a counter-claim
- not respond at all.
If the Defendants do not respond then you will be able to request judgement using the online portal. The Judgement will state that an Order has been made in your favour for the amount claimed and will give the Defendant (tenant) a time limit to pay.
If the tenants file a Defence/Counterclaim then this will be sent to you.
The Court will then send out instructions known as Directions. These may give a timeline for filing further evidence. The Court may then allocate a date for the hearing. There is also an option for free online/telephone mediation which can often resolve matters quickly.
The Court Hearing
There are various options available to the Judge at the hearing. The Judge may choose to adjourn (postpone) the hearing if further evidence is required or if the instructions in the ‘Directions Order’ were not followed correctly. Alternatively, having heard the evidence, the Judge may make an Order either in your favour or in favour of the Tenant.
If the Court finds in your favour then a Judgement will be written up which will state the amount of money that the Tenant has to pay to you and give a time limit for the tenant to do this. If you have been successful then you will also be able to recover the court fee from the tenant. The judgement may allow the defendant to pay by instalments. These Orders/Judgments are known as County Court Judgments or “CCJs”.
County Court Judgments (CCJs)
County Court Judgments appear in credit files which are used by all sorts of institutions. They are used when considering loan applications including mortgage applications and credit reference checks. The existence of an unpaid County Court Judgement on a person's credit file makes it difficult for an individual to obtain a whole range of credit and services.
If the Tenant does not comply with the CCJ then there are various different ways of enforcing the Judgement . One method of enforcement is known as an attachment of earnings order. This provides that a proportion of tenants earnings is deducted by their employer and paid to the Landlord until the judgement debt is paid. Another method of enforcement is known as a writ or warrant of control. This would allow an enforcement agent to seize and sell at auction enough of a debtor's goods in order to obtain the funds to satisfy a money judgement.