One of the most common worries that a landlord has concerns whether or not his rent will be paid. Some of the most frequently asked questions regard the subject of rent arrears and the complications these cause and the way with which these should be dealt.
It’s good business practice to ensure that you take a look at all of your rents each month on the day that they are due in order to ensure that they are being paid in a timely manner. Most of the time, they will be, but if they aren’t, ask questions immediately of your tenant or your agent. Without knowing what is going on, it’s very difficult to formulate any plans to rectify the situation.
Is the rent continually a day or two late?
Belvoir in Basingstoke usually take the day that a tenant moves in as the rent due date. If, for example, a tenant moves in on 6th of the month, then a standing order is drawn up for a day or two earlier, so that funds reach us early enough for us to pay the landlord on the due date. It may be, however, that the tenant isn’t paid until 7th of the month. In this case, it’s probably better to move the rent due date to 8th or 9th, to ensure that the tenant has his pay in advance of paying the rent.
We generally deal with this on the tenancy agreement and, instead of taking a month in advance when the tenant moves in, we take maybe a month and a week or whatever is required to make the rent due date fall in line with pay-day. The rent thereafter is monthly on a convenient day. And, by doing it this way, the rent due date is stipulated on the agreement and there is no ambiguity which is sometimes important when it comes to the serving of notices.
Is there a specific problem?
Maybe your tenant was unable to work for a couple of weeks and has temporary cash-flow problems. Reach some sort of written agreement over any arrears so that everyone is aware of the problem and agrees to the solution. It may be that going forwards monthly rent gets paid with an additional £50 until such time as arrears are paid off. Showing some understanding will go down well with a tenant, but don’t go setting a schedule that is too stretching for the tenant, or you’ll be re-visiting this in a few months’ time.
Quite correctly, in law, a tenant has many rights and these aren’t negated simply because he hasn’t paid his rent for some reason. Chasing late rent can be tricky and you must remember to do this sensibly and reasonably. You can’t just turn up unannounced making demands. You can’t hassle your tenant at his place of work or leave messages with others. If you are reasonable and seen to be so, you tenant is far more likely to respond favourably.
Initially, a phone call or a message on an answerphone, together with a polite email asking the tenant to make contact should be sufficient; your tenant might not even know he has a problem. Remember Tesco’s problem with their bank accounts in autumn 2016?
If you get no joy, it may be that your tenant is on holiday, so it might be worth asking at his place of work whether he is at work. (Don’t leave any specific details or mention that it concerns rent arrears.) After a week, try again and maybe drop a letter through the letter-box, but resist the temptation to knock on the door. You’re hand delivering the letter for expedience not to speak with the tenant face to face. A tenant when faced with excessive contact from his landlord, may bring a claim for harassment. The Protection from Harassment Act 1997 affords a tenant many rights.
If you have an insurance policy, there will be terms with which you need to adhere and typically at this stage, you might be handing everything over to them.
You should make contemporaneous notes of everything you do and keep emails or copies of letters. This should include all agreements for staged payments and a record of all rent receipts. If things escalate later on, this will all be useful evidence.
Chat to the guarantor.
Don’t forget that if you have a guarantor, you should involve him as early as possible. He won’t want to put his hand in his pocket and will invariably be in a position to bring some pressure to bear on the tenant. Most of the time a guarantor is a close relative and your tenant will want the embarrassment to go away as quickly as possible.
Avoid the temptation to bombard the tenant with demands or threats of any type. You cannot apply to the courts for possession of the property until a tenant is two months in arrears and there is nothing to be gained by angering your tenant during this period.
Your last resort if all else fails, is to serve notice. This presents its own challenges, not least the potential legal costs. You will also end up with a void period, the costs associated with getting the property ready to re-market and the actual re-marketing costs. Definitely take legal advice at this stage if you haven’t done so already.
If you would like to find out more about the subject of rent arrears, please feel free to call for a chat.
Why not engage an agent or change agents?
Last year, Belvoir in Basingstoke had no rent arrears at all. We are also able to offer our unique Belvoir Rent Guarantee, armed with which you need never be without rent or legal assistance.