Advice for landlords: What is a money claim?

With the likelihood of rent arrears increasing over the next 12 -18 months due to the financial climate, what are the options for a landlord when they have exhausted all informal avenues of resolution? Sadly, they are restricted to only one formal route: to begin proceedings through the legal system to obtain a County Court Judgment (CCJ) against those who owe the money.

How is a claim in court made?

The easiest way is through the small claims website Money Claim Online (MCOL). A fee is payable, which is dependent on the amount owed. The current court fee starts at £25 for a claim of up to £300, up to a fee of 4.5% of the amount being claimed between £10,000 and £100,000.

However, before a claim is started, the claimant (the person bringing the claim) needs to ensure they have provided the defendants (the person or persons who the claim is being made against) sufficient notice that money is owed. If this isn’t rectified within a stated period, normally 14 days, then small claims action will be brought against them. This is legally required to ensure both parties have had sufficient time to negotiate the payment of any debt before legal proceedings commence. Failure to comply by the claimant could see a claim being dismissed by the Judge.

What happens after a claim is made?

Once a claim is submitted using the MCOL system, the defendant will be notified by post that a claim has been made and the reasons given by the claimant for the money being owed. The defendant will then be given a period of time to respond either to (a) agree that all the money is owed (b) state that the money is not owed or (c) agree with part of the claim. Obviously, if the defendant agrees, then they need to pay within the time period ordered by the court or if applicable, adhere to the repayment plan schedule which could be agreed between parties.

More likely than not, the defendant disagrees with the claim by putting forward lots of arguments as to why the money is not owed. If a defence is put forward then the claim will proceed by default to the hearing stage, which comes with numerous requirements of both parties. We intend to cover this in plenty of detail in the next blog.

Court judgement

If the claimant is successful in their claim, then a CCJ is entered against the defendant and they are usual given 14 days to pay including the costs of the court fee. If they pay within this timescale, then they can apply for the CCJ to be struck off the CCJ register. This then removes any negative effect to their credit rating.


The small claims mediation service is a free service provided by the Civil Court for parties involved in a small claims dispute. If either party refuses the offer of such a service or declines an offer of settlement during the mediation, this is not a factor that can be made known subsequently to the judge.

The first thing to understand is that a mediator is not a judge. Their role is not to decide who is right or wrong. They might not know a great deal about the claim or have any particular legal training or knowledge in this area.

However, they are skilled in negotiations and helping parties to reach terms of settlement. They will try to break down barriers and encourage the parties to set out what it is each of them is seeking, and then explore whether there is middle ground to strike a deal.


Starting a money claim is normally evidence that previous negotiations have failed and the landlord has reached their wit’s end. In the majority of cases, depending on the financial circumstances of the tenant or potential guarantor, it could be seen as “throwing good money after bad” but some landlords feel it is necessary, so that future landlords are aware of the potential risk of a tenant if they are sensible enough to conduct a credit check.

The property experts at Foxes have 25 years’ experience in helping landlords manage their properties successfully. Contact us today for a chat – email or call 01202 299600