Non Paying Guests

[SherborneCottages]

You are all going to be very disappointed with me but here goes..!!

During the Summer we had a family staying with us for many weeks. As often happens with extended stays in our properties (particularly when it is families staying because they are in the process of moving house or having renovations or when it's contractors on a job or similar) they extended their stay a couple of times. Our normal protocol with this is that guests ask if they can stay longer as soon as they know, we advise them of the cost/draw up an invoice and get them to sign another booking form with the new dates. Normally they pop into the office that day or in the next couple of days to pay by cheque or they arrange a transfer.

So this is what was happening with the family who stayed over the Summer and was nothing unusual. Come September it had been a few weeks since they had left and they got back in touch with us to say they needed somewhere to stay again. This time, short notice - they would be arriving in a few days. But they paid by card and the property was already empty so it was not a problem. Again, they started to extend by a week or a few days at a time however it was becoming more and more late notice - a day or two (again, not too unusual, we have had this happen many times before). We were happy to have a longer booking at this time (no cleaning charges, no laundry, guests during a quiet time with few other bookings in the other properties) but their payments got a little behind and when we could no longer extend their stay come December because all of our properties were then booked up with Christmas stays, they left owing us for the last week.

As they had paid a lot of money up to this point we had no reason not to trust that they would not pay this last amount but the husband has been abroad this whole time so we were trying to be understanding about the difficulty of international transfers. We kept in touch over the next few weeks - checking in every so often to remind them of the overdue payment and were always told that it would be on it's way soon - they were very busy over christmas, etc, etc.

Late January rolls around and we get an e-mail on a Friday night asking if they can move in the next morning! Again, the property was empty and we had plenty of availability coming up (Jan/Feb is by far our quietest time of year) and after a chat both me and the manager decided that if we turned them away now there was no chance at seeing the £500 they still owed us so we may as well take them in and hope we got not just the £500 but another week or two rent. (I can hear you all sighing and shaking your heads now!)

What started off as a week has now been extended several times to where they now owe us about 4 weeks. The wife has paid us a few bits and pieces here and there as 'goodwill' but the husband keeps on having excuses as to why the full balance hasn't been paid - the banks in Palestine were on strike, he's going to the bank tomorrow, he was waiting for a transfer from his business, etc, etc.

I am loathe to throw this poor woman out as she is there with four children and nowhere else to go however obviously we cannot accommodate her any more if we are not getting paid. I was just wondering what sort of rights we have as far as A) Getting them out on Friday (when we have extended their stay to). B) Getting the money owed to us.

Firstly, I am obviously hopeful that the husband will transfer the money before Friday and if we don't receive it then I hope (and expect) that she will leave of her own accord on Friday morning. However, if they do not I am wondering what the correct procedure for removing guests is - does anyone have any experience of this?

And once they are gone, if they have not paid, is there any way that we can go after them for the money they owe us?

(Also, I suppose I should make this 'sticky' - how do I do that?)

[Nemo]

Just wanted to say bad luck to start with! You can't make it a sticky, only a moderator can do that, but this is personal to you so I don't think it's necessarily relevant to make it sticky.

I can see how you've got into this situation, but clearly you must extricate yourself before it gets any worse. I would assume you could take them to the small claims court in the long term for the finances? However, you will need an address/contact details for them as otherwise you won't be able to serve the necessary papers on them. As long as they don't have a short term tenancy you should be able to get them out, but others will know more than me about that.
The landlordZone forum can be quite helpful for this sort of thing.

[SherborneCottages]

Thank you Nemo - I was expecting much more of a telling off!!

We have already decided once and for all that if we do not receive payment they will definitely be leaving on Friday - no more extensions. We will just have to cut our losses and move on. The way we are trying to look at it is that we will only be out of pocket for the cost of bills during that time because we have not had to turn away any bookings (we still had availability in our other properties otherwise we would have put a stop to this earlier) and as it has been cold and intermittent snowing here we would have had to have at least some heating on - therefore the bills is not too bad and considering how much they HAVE paid for their stays over the Summer and in September we are still coming away from it very well. At least it's taught us to be much stricter regarding extending stays like this!

I am hoping that there really will not be a problem with them leaving as I am very careful about making sure guests always have a completely up to date Booking Form clearly stating a departure date (we had a terrible experience with (professional) squatters in a property in London we had awaiting planning permission and it cost us thousands and took months to get them out so I'm usually very careful about any potential for squatters rights) but I will have a good look through the LandlordZone just to prepare myself! Thanks!!

[greenbarn]

Really sorry to hear about this. Head shaking is easy enough from a detached place, but it's not difficult to understand how you got into this situation - something to do with the essential human characteristic of trust?

I don't fully understand what your rights are in the circumstances; it may be affected by whether they've been there more than the number of days (is it 28, 30 or 31?) that definitely qualifies as a holiday letting period. One to check asap.

As for recovering what's owed to you, I don't see why you shouldn't be able to use the Small Claims Court; I've no experience, but I know there've been posts on here from one or two people who have used it successfully (and fairly painlessly), so maybe they'll chip in with some useful info. It may well be a useful tool anyway in your negotiations - "I hope it won't be necessary for me to seek a judgement and award against you in the SCC, etc etc ...."

Good luck with an unpleasant situation, and hope it resolves easily.

ps ETA - Nemo posted while I was typing this - looks like a useful contact from her.

[Holiday Ray]

I'm afraid I don't have any words of advice for you with regards to recovering any losses, other than what has already been suggested, but just wanted you to know that (imo) I think you handled the situation as well as you could have really.

If you had asked for a bank transfer into your a/c before you allowed them to stay this last time, then maybe you would have got some money up front, but, as you say, you may, just as easily, have suddenly found yourselves £500 out of pocket.

I suppose, in hindsight, (and isn't hindsight a wonderful thing) one could ask oneself why they seemed to be moving around and in need of 'temporay accomodation' so often, but it's often only when one reflects on experiences that we learn lessons.

Really hope things work out for you - placing your trust in them should bring its just rewards

[Nemo]

Neither of these threads are good news, but just thought it worth you reading so you can be prepared for the worst. The implication is that maybe you have let them become tenants if you knew they were not staying for holiday purposes. Sorry, but maybe it won't come to this.

From Landlord Zone Guests refuse to leave
From LMH Short term let

[Bridg1t]

Hi Sherbourne Cottages, what a stressful situation & poor you. It is something I dread, and am not legally qualified, but I think I understand some of it!

I'd be awfully grateful if someone could add, confirm or contradict & we could all make sure our booking forms etc are done in such a way that in this difficult situation we know what to do and what our rights are.

Re the tenancy thing...I think, that with holiday lets, you are granting a license, rather than a tenancy. Some of the main points being:
They don't have exclusive use (you make it clear that you are allowed to go in, at reasonable times, but without their permission to carry out maintenance & provide services). If someone has a tenancy and declines a landlord entry, it's illegal for the landlord to go in. You call it a "holiday letting agreement" and it has an arrival & departure date & time.

Some people have a clause in their t&c's expressly stating that it does not form an AST under the ll& tenant act (I don't do this).

I also ask people for their "residential address", to establish they are resident elsewhere.

What I don't know, is what happens in an instance where a guest refuses to leave & the guest calls the police. Presumably you would have to demostrate that they had a holiday letting agreement & not a tenancy- thus providing the "offer" (your website or listing site) email comms between yourselves & the agreement itself. If it was established that they were not your tenant, presumably you would not be committing a crime, but would be left with the task of peacably removing them.

In the comparable situation, if you evicted a "tenant" (not guest), & the police were called, they would re-instate the tenant, and, I believe might well charge you with harrassment.

Does anyone have any more definitive info, or personal experience of this.

And lastly, I hope, Sherborne, that you get this sorted out without too much stress & heartache.

[Bridg1t]

Hi,
I've just looked at Sherbourne's website & it does indeed say that the letting agreement is not intended to form a tenancy, so I don't think she can have become a tenant, can she?

[French Cricket]

Hi Sherbourne

I'm really sorry to hear about all this - it must be sooo stressful for you. I'm just picking up on something that Giles has mentioned and that's the issue of whether you have a full-time residential address for these people - if you have, and your contract with them is clearly stated as not forming a tenancy (which it sounds as though it is) you should have no problem getting a small claims court judgment against them (mind you, getting payment following such a judgment is another thing entirely ...). It's relatively cheap and painless - your local CAB will help you through it if necessary, and might even accompany you. You may find as well that they have a free legal advice surgery (I was a CAB manager in a past life).

If you haven't got a residential address for them (please tell me you have .....) I'm afraid it could all start to get a bit trickier .....

[Nemo]

It's quite a complex area, so I'm definitely not qualified to answer per say! The main thing that worried me about the information given so far by Sherbourne is if they don't have a fixed address elsewhere. Also if it is not for the purpose of a holiday, which if you are letting for lengthy periods is more likely to be the case, that even if you didn't intend them to become tenants, by default they may?

I don't want to muddy the water and all may be well if they leave on Friday, but it concerns me that there have been several long lets, even if there have been gaps between. Is the property still qualifying for FHL as well in these scenarios of extended stays?

[French Cricket]

I meant to add - and Nemo posted as I was typing - that the other thing is whether you've drawn up a separate contract for every time they've stayed with you, and also what you've done -contract-wise - about them extending their stays?

[Bridg1t]

Hi,
For the housing act, I don't think the duration matters....just the intention of the contract (or of the landord rather). So that if I take a holiday for 8 weeks in a remote part of England & then want to stay claiming that I have become a tenant, I cannot!

However, my landlord, having rented for 8 weeks would not be allowed to count those 8 weeks as part of his qualifying days so far as the HMRC were concerned.

Of course, he/she'd only be obliged to count to 210 (is it that now??), but in the instance he did series of 8 week holiday lets, he wouldn't get the capital allowances (but he would, presumably get 10% w&t).

So you could have a year's worth of 8 week holiday lets, and be able to legally terminate the stays therefore (housing act), but you'd not get your capital allowances (hmrc).

Anyone else have a view on this....this is only my unqualified nerdy experience re having read the housing act & hmrc's website!?

[kendalcottages]

Sorry to hear of your situation, SC.

As for recovering what's owed to you, I don't see why you shouldn't be able to use the Small Claims Court; I've no experience, but I know there've been posts on here from one or two people who have used it successfully (and fairly painlessly), so maybe they'll chip in with some useful info. It may well be a useful tool anyway in your negotiations - "I hope it won't be necessary for me to seek a judgement and award against you in the SCC, etc etc ...."

The big problem I foresee with this is, as Nemo mentions, where do you serve the papers. Do you have an address for these people?

I have used small claims successfully on a number of occasions (thankfully not for a while, and never with respect to my holiday rental) and most of the time have found the process to be simple and straightforward. However, it would be difficult without a fixed address for the defendant.