Living with a housemate can be a great way to reduce living costs and live in a property you would perhaps be unable to afford alone. For some, it can also be a source of companionship and friendship.
However, sharing a home with someone can cause problems if your housemate fails to keep up their end of the arrangement and doesn’t pay key housing payments, like rent and bills. This can understandably make you worry about whether you could be chased for their debt – even after they move out.
What is housing debt?
The term ‘housing debt’ can be used to describe a wide range of debts related to renting or owning a property. However, it’s most commonly used as an umbrella term for rent and utility arrears.
For example, if you fail to pay rent on time, you’ll be in arrears to your landlord and will be expected to make up for the money owed. In most cases, your landlord will contact you asking you to repay the debt as soon as possible to avoid legal action.
Similarly, if you forget to pay an electric bill on time, you’ll be in debt to the electric company. Most utility companies will chase up the missed payment and add late fees if you don’t pay by a given deadline.
It’s important to keep up with your housing payments to avoid debt. Failure to repay housing debt can lead to serious consequences, including legal action.
How much debt do you have?
Who is responsible for the bills in a shared house?
If you live in shared accommodation, the responsibility for the bills falls on whoever is named on the credit agreement. In other words, if both you and your housemate are named in the tenancy or utility agreement, you’ll both be legally liable to pay rent and bills for the property.
This also means that, if only your name is listed on the agreement, the other person cannot be chased for payment and you’ll be required to pay 100% of the money (even if your housemate sends you their share privately).
When it comes to rent arrears, most landlords hold tenants jointly and severally liable, meaning the landlord can pursue anyone listed on the tenancy agreement for the total amount owed if it goes unpaid, not just their share.
Can a housemate leave you with their debt?
If your housemate has moved out and refused to pay their final bill or missed several monthly payments over the course of their tenancy, it’s normal to worry about whether you could be chased for the debt.
However, as previously mentioned, the only way you can be held responsible for someone else’s debt is if you were both listed on the agreement (e.g. for rent, gas, electricity, phone, internet, etc.). However, even if both you and your housemate and contacted about the debt, they may still refuse to pay, leaving you in a difficult situation.
Therefore, if only your name is listed on the bill and your housemate refuses to pay anything at all, you’ll be legally responsible for ensuring the bill is paid and it is you who will be chased for payment. The best course of action in this situation is to make up the missed payments yourself (if you can) and then try to recover the debt from your housemate.
My housemate is refusing to pay. What should I do?
If your housemate is refusing to pay their fair share of the rent or bills for the property you share, there are several things you can do. We’ve outlined your options below:
Have a conversation
The first thing you should do is talk to your housemate. They might have underlying circumstances preventing them from paying, such as a job loss, family emergency or physical or mental health problem.
During the conversation, reevaluate the bills and ensure your housemate agrees on the amount owed. Sometimes, disputes can arise due to misunderstandings or miscalculations, leading to unnecessary problems that could be resolved in a single conversation.
It may only be a temporary situation that you can come to an understanding over. For example, if you’re willing and in a financial position to do so, you could agree to cover the total share of the bills for a set period or accept a reduced amount until they get back on their feet.
Remember to tread carefully and approach the situation with empathy until you have a better understanding of what they are going through. Acting hostile or being accusatory can lead to you falling out and being unable to resolve the problem without getting a third party involved.
Contact your landlord
If you’ve spoken to your housemate and failed to resolve the problem, the next step is to inform your landlord. If you’re both individually responsible for paying your share of the rent, they may already be aware.
Your landlord will likely then contact them directly and ask for an explanation, but you should always at least try to come to an agreement with your housemate before taking this step to avoid further problems.
Most landlords want to make sure their tenants are happy and safe in their accommodation and will use every avenue at their disposal to ensure this is the case. Because of the extra fees involved, they will also want to resolve the problem before resorting to debt collection tactics or legal action.
Your housemate might be more cooperative when contacted by your landlord if it means it could potentially result in them being asked to leave the property and find somewhere else to live at short notice.
Seek legal advice
The last resort is to seek legal advice. Unfortunately, most financial charities and organisations will advise you to pay all of the money owed as soon as possible if you’re in a position to do so and recover the debt at a later stage.
Sometimes, telling your housemate that you’re considering legal advice can prompt them to pay their debt out of fear of the potential consequences that could arise.
If they are eventually served with a County Court Judgment (CCJ), for example, this will impact their credit rating and ability to get a loan or mortgage for six years.
However, if the issue has gone on for a significant length of time and the money owed is substantial, you might be advised to lodge a claim with the small claims court. Talking to a financial expert can let you know whether your case is worth how much it would cost in legal fees to take it to court.
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
What should I do if bailiffs are chasing me for a housemate’s debt?
Having bailiffs knock on your door for a housemate’s debt can be daunting and it’s understandable to worry about what your legal rights are and how it could potentially be traced back to you. However, as previously mentioned, the only way you’re legally liable to pay a debt is if your name is also listed on the agreement.
When a bailiff is instructed to collect a debt, they’re usually given the last-known address of the debtor. This means that, when they visit you, their main goal is to recover payment of the debt or seize goods that they can sell to help them recover the money owed.
If a bailiff visits while the housemate in question isn’t home, it’s important to prove that your possessions belong to you – especially if you own any high-value items like computers, laptops, and jewellery. Bailiffs are legally exempt from removing items that belong to anyone else living in the property – even if the debtor only has a few bits that belong to them or not enough to cover the debt.
If a bailiff visits to collect a debt from a former housemate, show them a copy of a tenancy agreement, utility bill, or any other document that proves they no longer live there. This should deter them from returning.
It’s also important to note that despite what they might say, bailiffs can’t force their way into the property or use a landlord’s key to gain access – this is considered unlawful entry. If you’d prefer, you can talk to them through a door or letterbox.
Can my credit rating be affected by a housemate’s debt?
When you live with a housemate, your credit rating should not be affected by their debt as you’re not financially linked to them in any way. This means that, if they get into debt and damage their credit score while living at the property, it will have no impact on you.
The only way you’re financially linked to someone is if you share a joint bank account to pay rent or bills, which is common among housemates who are friends or partners. If you’re sharing a property with strangers, it’s recommended to keep your finances separate and manage your share of the rent and bills individually if you can.
The main challenge likely to arise is if you pay the energy company from your account and your housemate refuses to pay their share. Even if you always pay your share, if you can’t afford to make the payment in full, it’s your credit score that will be affected.
Remember, credit checks are no longer performed on addresses as a whole, only individuals. So even if your housemate has a poor credit score, this shouldn’t affect your credit score or ability to get anything from a loan, mortgage, phone contract, or bank account.
Debt help tailored to you
From writing off a large portion of your debt, to readjusting your budget, we’ll find a solution that suits you.
Conclusion
Living with another person – especially someone you don’t know – requires a certain level of trust and understanding. Even if you always pay your rent and bills in full and on time, a housemate refusing to pay their share can cause problems for you.
However, the only way a housemate’s debt can affect you is if you’re both listed on the credit agreement. For example, if you pay your rent separately and you always make payments as agreed, your housemate’s rent arrears should have no impact on you or your credit score.
If you’re worried about a housemate’s debt and whether it could potentially be linked to you, don’t hesitate to reach out for free advice. Knowing your legal rights and responsibilities in a situation like this is crucial to ensure you’re acting on the side of the law and your finances are protected.
