What can I do if my tenant doesn’t pay the rent?
The biggest headache for any landlord is a tenant that fails to pay their rent. So here are a few tips and procedures to prevent your tenant taking you for a ride.
References - As prevention is better than cure make sure references are taken up on all prospective tenants prior to signing of a tenancy agreement. Steer clear of any applicant who has a history of missing rental payments regardless of the hard luck story they may tell you.
Missed payments alerts - Make sure you have robust system for alerting you on the first day that any payment is missed, the quicker you can act the more likely you have of getting your rent. It is likely that you tenant has more bills unpaid so make sure you are at the front of the queue.
Issue rent arrears letter - Make sure you issue this letter immediately so the tenant is given the opportunity to pay the outstanding rent, as failure to do so may result in legal complications if you seek eviction at a later date.
Issue a Section 8 Notice for Rent Arrears - This is a formal notice of a breach of tenancy and is a legal requirement if you proceed to court to obtain eviction at a later date. Many landlords fail to send a Section 8 Notice at this first missed payment and try to negotiate with the tenant, but then find any court proceedings delayed for this notice to be issued. The Section 8 Notice gives the tenant 14 days to rectify the rent arrears.
Guarantors - If there is a guarantor involved with a tenancy you must ensure that they are included in all correspondence.
Negotiating with the tenant - it's always best to be prepared to negotiate on any rent arrears. You need to strike a balance between being too easy going and flexible and too harsh. People can have short term financial problems so offering to negotiate may resolve the problem and save you a void period on your property.
Future payments - It is always advisable to check that a direct debit is still in place for future payments. Often a tenant in difficulties will cancel the direct debit and offer to pay in cash, but it's easy for one months arrears to turn into two or more very quickly without a direct debit in place.
Section 21 Notice - if the tenant fails to rectify the arrears within 14 days or comply with any negotiated payment plan then you should issue a Section 21 Notice. This informs the tenant that you will end the tenancy agreement in two months and apply to the court for eviction if they fail to leave the property at the end of that period.
Missed rental payments are a real headache for any landlord but making sure that the above process is followed may prevent a bad case getting worse and leaving you financially worse off.
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