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Al McGuinness

Arrears - Is £525 now worth more than £2500 in 1 year?

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I have a runaway tenant who is prepared to go to court over rent arrears.

He and his legal counsel concede that;

- he lived in the property for X amount of time

- he paid X amount of rent for many consecutive months and therefore acknowledges a contract

- there is legitimate correspondence between us relating to it

(Note for future - check that their signature on the AST matches that on their driving license)

He is still however prepared to take this to court and pay legal fees to defend the case - defence he has put up so far consists of the fact there was mould in his room (I told him how to remedy, and cleaning is his responsibility), the fact I didn't bring a case til 1 year after (it's within the statute of limitations, I reminded him 3 times, and he said he'd call the police for harassment), the AST signature isn't his (false but regardless, a legal contract was created when he moved in). He has 'witnesses' but to what I'm not sure. How they could have witnessed the presence of mould or that he didn't sign an AST is legally dubious and quite beyond me.

In terms of settlement, he is prepared to settle for a full and final £525. He owes £2500, but with a no-win-no-fee solicitor agreement these 2 figures become £462 now or £1750 in ~1 year (solicitor estimation of court date is next year).

To try and assess this, I've used Net Present Value, which I am familiar with but a novice in using. Not sure if cell C11 is correct, but let me know if not. I've used 8% as the discount rate benchmarking against  P2P returns.

What do you think?

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Hi Al

As frustrating as it is, I'd pay up and get him out right now. Less sleepless nights for you and who knows what damage could be done to the property over the next year.

Just make sure you get the paperwork done correctly or he could be back for another bite out your butt later.

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