Managing Rent ArrearsA late rental payment can be a stressful situation for a landlord, especially the first time you experience it, however unless you’re extremely lucky, its an eventuality most landlords will at some point face. The golden rule is not to panic or overact. There are many reasons why a rent payment could be late, and they don’t all automatically mean you have a bad tenant.  Below we explore how to deal with late rent payments, and tips on how to avoid late rent in the first place.

Send a Reminder

Once you’ve discovered the rent has not been paid, send a short reminder email or text to your tenant. Remain polite, friendly, and objective, and include the following points:

• Let them know the rent has not been received.
• Ask them to check to see it has left the account their end.
• Ask them to let you know asap if they are having problems paying their rent this month.

In most instances the lateness will have been an oversight, maybe the tenant forgot, didn’t realise the date, or there has been a problem with their payment going through, and tenants will usually rectify this once it’s been brought to their attention. However, in some cases there may be a problem, and it is always best to be in communication with your tenant if this happens. Make sure you keep a record of all written correspondence in case the matter escalates.

Offer Solutions

A tenant having issues paying their rent can be an extremely sensitive and stressful situation for all parties involved, so try to approach it in a courteous and level-headed manner. Any unreasonable behaviour could negatively affect your position later down the line. Try to find out why the rent is late, maybe the tenant has lost their job, had a big, unexpected expense, or been victim of a crime, this may help you figure out if this will be a short or long-term occurrence. From there you can start coming up with solutions:

• Can you arrange a payment plan with the tenant?
• Can you help them apply for the housing element of Universal Credit?
• Can you change the rent due date so it’s in line with their payday?
• If they can simply no longer afford the rent, can you let them out of their contract early once they have found somewhere more affordable to live?
• Are you able to lower the rent for a few months?

Remember, if the rent has not been paid, this does not mean the tenant has lost any of their statutory rights to the property. You can’t change the locks, cut of the power, or kick them out.

Talk to the Guarantor

If the tenant has a listed guarantor, then you can also try to get in touch with them asking for them to speak to the tenant, and requesting they pay the arrears. Hopefully the guarantor will give the tenant the nudge to either pay, or at least get in touch with you. If the tenant is struggling to pay, they may be able to help them out, or help with a payment-plan.

Official Notice

After taking all the above steps, the rent still has not been paid and you haven’t heard from your tenant, it is time to serve a more official rent arrears reminder notice detailing the potential consequences of the rent continuing to not be paid. Consequences could include eviction proceedings, or interest being added to the arrears, but it depends on what is included in the tenancy agreement. We would usually send the first notice between days 5-7, and then another on day 14.

At this point you may have to make a decision on how you’re going to proceed, as evictions can be a lengthy and costly process which may still leave you out of pocket. Trying to squeeze money out of someone that simply does not have it can be a futile endeavour. As long as your tenant is communicating with you and trying to remedy the situation, then eviction proceedings should always be kept as an absolute final option.

Eviction Proceedings

If your tenant falls into 2 months’ worth of rent arrears, then you can begin the eviction process. This is done by serving a Section 8 Notice, however, if the tenant pays back any of their unpaid rent during this time, then the Notice would become invalid if it went to court. The moment the rent is no longer in arrears by 2 months (even if its just a penny under), then the eviction process has to begin again.

The tenants could also challenge the eviction notice, in which case it will go to court. Here you would need to provide evidence showing you made every effort to inform your tenants of their arrears and gave them ample opportunity to pay. Therefore, keeping all your correspondence and documentation is imperative.  

An eviction has many legal implications so it’s advisable to seek out an eviction specialist to help you get it done efficiently. As an alternative it may be cheaper and quicker to allow your tenant to surrender the tenancy and cut your losses.

Insurance/Deposit

If you’ve invested in landlord’s insurance this will usually cover any unpaid rent, so at least your income is protected. Get in touch with your insurance provider to find out how to make a claim at your earliest opportunity.

If the tenancy ends with rent arrears still in place, you may be able to request to deduct any unpaid rent from the security deposit.  

Tips to Avoid Arrears

Prevention is always the best policy when it comes to late rent, so these tips will give you the best opportunity of avoiding arrears in the first place:

• Include a paragraph in your tenancy agreement asking tenants to set up a standing order to pay their rent. This then eliminates the chance of your tenant forgetting.
• Reference your tenant before signing them up, to ensure they are able to be able to afford the rent.
• Ask for a guarantor, and reference them as well.
• At the start of the tenancy give your tenant clear details on the account the rent needs to be paid in to, and what date each month this needs to be done by.
• Set up automatic reminders when the rent is due.
• Create a positive tenant/landlord relationship, so if the tenant does unexpectedly fall into arrears, they will feel able to tell you early to try and avoid any long-term issues.

Ask A Letting Agent for Help

Rent arrears can be an awkward, stressful, and upsetting situation to have to deal with. A professional letting agent can help with this, they will have experience on how to correctly approach your tenant and can be a third party to help problem-solve and take some of the emotion out of any escalating situations.  

At Aquarius Homes our letting agent services are friendly, professional and can be tailored to help you out a little or a lot. Get in touch today to speak to our ARLA trained team and find out how we can help if you are having issues with rent payments.

Call: 01225 840 007

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