When a personal guarantee has to be given in order to give a lender the security it needs, the guarantor hopes that the guarantee will never be called in. However, when it is, the loss suffered by the guarantor will normally qualify as a loss for Capital...
Recovering possession of residential premises because a tenant is in arrears of rent is much easier than it once was, but is still subject to pitfalls.
Possession can only be ordered by a Court. Unlike business premises, where possession can be recovered in appropriate circumstances by re entry into the premises, any such action is unlawful in relation to residential premises.
Most residential tenancies are assured or assured shorthold tenancies. Before proceedings can be started against the tenant of such a tenancy notice in the form required by the Housing Acts must be served on the tenant.
If the Notice is properly served and the procedural formalities followed then the Court must Order possession if the arrears are sufficiently high: when the Notice is served; and when the proceedings are commenced; and when the case is heard.
In other cases the Court may Order possession.
Possession proceedings take time. At least fourteen days notice in the correct form must be given before proceedings are commenced. The Government has issued targets to the courts to list possession claims for hearing within eight to twelve weeks. When a Judge makes a possession order, in a case where he must make an order as above, then he can make the order for possession to take effect on a date up to six weeks after the hearing.
It is therefore important for Landlords to actively manage any arrears situation and to act promptly if the tenant does not pay or cannot explain any difficulty and does not keep to any promises he makes about paying off arrears.
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