Rent North East will collect the rent from your tenants and pay this on to the bank account of your choice, after deducting a management fee and any other costs agreed with you.
Rent is paid out on the last day of each month.
How we collect rent:
We offer tenants various ways to pay their rent, so as to make this as easy as possible for them.
Recurring card payments
Card payments (over the phone)
PayPal (we try to avoid this one due to high transaction fees, but it is sometimes a great option for international payments.)
Skrill (As above.)
Cash in bank
When the rent has been collected then the tenant received an updated statement via email. We will then deduct our management fee, as agreed, and any other costs pertaining to that tenancy, e.g. maintenance costs. The remaining balance will be transferred into the bank account of your choice.
We try to make payments on the day on which we receive the funds from the tenants, excluding weekends and public holidays.
Our philosophy on arrears collection:
Our research has found that 95% of arrears are due to one of the following reasons:
- Tenant is not aware of arrears
- Tenant is unable to manage finances and requires assistance with this
- Tenant cannot afford to pay rent
The remaining 5% of arrears are usually down to tenants who refuse to pay because of an issue that they have at their property, or even less commonly because they simply do not wish to pay.
We also feel that rewarding or complementing tenants for prompt rent payment is a very important factor in preventing future rental arrears.
Our attitude when collecting rent is that we contacting the tenant in order to assist them. We emphasise that we are here to help, as apposed to making the situation "Rent North East vs the Tenant"
When a tenant is not aware of the arrears then we make them aware of the ammount owed, and arrange payment.
When a tenant is unable to manage their finances then we will go through their expenses and income, and see if there are any benefits that they may be entitled to (we use http://www.entitledto.co.uk/benefits-calculator/)
If a tenant is not able to pay their rent then we will offer them to move into a cheaper property, after speaking to the landlord to discuss any other options, such as guarantor payment, or rent reduction where reasonable.
If a tenant does not wish to pay their rent due to maintenance issues then we will refer them to the PRS of which we are members. Our maintenance systems is directly linked to the PRS, for quick and easy assistance.
As soon as a tenant is in arrears, Rent North East will contact them to collect the arrears. Contact is made via telephone, email, SMS, letter, and property visit.
If there is a guarantor then the guarantor will be contacted and any legal action, such as a CCJ, that is taken against the tenant will also be taken against the guarantor. The tenant will be informed of this.
If a deposit is held then a single claim will be started via the DPS.
A section 8 notice will be served where there are grounds to do so. This includes two months of arrears or any breach of the tenancy terms. On expiry of the section 8 notice, we will check whether the tenant is in situ. If the tenant has not left then we will apply for a court re-possession. This is a lengthier process which we will explain to you in the instance.
A section 21 notice will be served if we wish to evict the tenants, if there is less than two months of arrears and there has been no breach of the tenancy terms.
We will also automatically contact the local authority when an account is two months in arrears, to request direct payment of rent.
Sometimes a CCJ will be opened, as this can sometimes help to incentivise a tenant to pay. Where a CCJ is not opened, the court will be requested to make a judgement for the rent arrears and any reasonable charges.
Legal fees (for CCJ's against tenant's or guarantors)
The tables below illustrate the costs of commencing action within the courts in England and Wales where your debt is below £100,000. Many of the costs shown below are recoverable from the debtor as part of your claim and are highlighted in the ‘debtor pays’ column. There is however no guarantee that you will win your claim and where it proves unsuccessful you will have incurred the costs below without the ability to recover them from your debtor.
|Debt Owed||Court Fees||Costs (plus VAT)||Total + VAT on Costs||Debtor Pays|
|Up to £200||£25||£60||£85||£75|
|£200 – £300||£25||£70||£95||£75|
|£500 – £600||£60||£95||£155||£130|
|£600 – £1,000||£60||£110||£170||£130|
|£1,000 – £1,500||£70||£120||£190||£150|
|£1,500 – £3,000||£105||£130||£235||£185|
|£3,000 – £5,000||£185||£140||£325||£265|
|£5,000 – £10,000||£410||£160||£570||£510|
of the claim
|£160||£160 + 4.5%
|£100 + 4.5%
of the claim
|£165||£165 + 4.5%
|£100 + 4.5%
VAT is payable on the costs element and cannot be reclaimed from your debtor.
Remember if you are adding interest and compensation it may take the debt into a higher banding with higher costs.
Where recovery is successful then the debtor will be liable to pay the amount in the ‘debtor pays’ column, although this may occur after you have paid the costs to us.
JUDGMENT AND ROUTINE ENFORCEMENT
|Action||Amount of Judgement||Judgment Costs + VAT||Execution Costs + VAT||Execution Fees||Total (+VAT on Costs)||Debtor Pays|
|Bailiff||Up to £125||£27||£2.25||£77||£106.25||£101.25|
|Bailiff||£125 – £600||£32||£2.25||£77||£111.25||£101.25|
|HCEO||£600 – £5,000||£37||£51.75||£66||£154.75||£139.75|
Enforcement costs for the bailiff or HCEO will be collected direct from the debtor. Where they are unsuccessful then there will be a standard abortive fee of £75 + vat for each address visited these costs are set by the courts.
Enforcement matters will be referred to an HCEO business called Elliot Davies.
Please note that where your debtor is based in Scotland or Northern Ireland then enforcement costs will revert to the debtor’s jurisdiction and may vary. Please contact us for further information.
Rent North East + Experian:
Data about rent payments is sent to Experian and will show on a tenants credit history. On time payments will improve their credit history, whilst late payments will have a negative effect. This is a great incentive for tenants to pay their rent on time, or to pay back any arrears.