If your tenant doesn’t pay their rent, there are a few things you can do, depending on the circumstances. It is good practice to ensure you are keeping records of rent payments. Keep track of when payments are due and when they are paid, and produce dated receipts. If you begin eviction proceedings, this paper trail will be important.
Remember that you should remain professional and calm, or your tenants might be able to claim that you have harassed them, which will hinder your efforts to collect the rent you are owed. You should not enter the property without permission, or take other actions like removing belongings or changing locks.
Speak to your tenant
The first step should be to speak to your tenant to find out the reason for the late payment, removing a tenant can be costly and time-consuming and there may be a sound reason, if you have taken the wise step to include a guarantor for the rent then you could approach them if the rent is not bought up to date within a week or so.
If you have a good relationship with your tenant, you might consider coming to an alternative arrangement, such as a rent “holiday” or potentially reducing the rent for a period. If your tenant is struggling to pay because they have lost their job or are on a low income, they may be eligible for benefits. If they are going on benefits then please consider that these can take several weeks to get in place, it is suggested that you accompany the tenant to a meeting with the DWP and arrange for the rent, plus any arrears to be covered under the Third Party Deduction scheme (see our section of the website for more details), here once their benefits are sorted the DWP pay the rent, plus some of the arrears directly to the landlord out of their benefits. This gives landlords reassurance they will get paid so you can give the tenant some breathing room.
If the tenant is genuinely unable to pay, they might break their contract and leave the property. It can often be the easiest and most cost-effective option for you to let them do this and to get a new tenant.
If your tenant does not respond
If you are unable to contact your tenant, or if they refuse to pay after you have spoken to them, the first thing you should do is send them a formal written demand that they pay their arrears immediately, and that any future rent should be paid on time. If you still do not receive the rent payment 14 days after it is due, send a follow-up letter. Try to contact your tenant’s guarantor if there is one. Their guarantor may be able to pay on their behalf or help you get in touch. If referees were provided as part of the renting process, they may also be in a position to help you get in touch with your tenant.
Steps to take before legal action
A record of past rent payments is especially helpful. You should, wherever possible try and contact
your tenant.
there are three key options to consider.
- Set up a payment plan: Allow them to make up the months rent over 12 monthly payments, giving the tenant get back on their feet by slowly paying what is owed back to you.
- Consider reducing the rent: This may not sound appealing but it would avoid the need to get the property back, readvertise it with an agent, cover the cost while the property is empty and so on. This will depend on your personal feelings for the tenant, if they have been excellent for many years then they would deserve more compassion than a new tenant.
- End their contract: If the issue seems unresolvable it might be best to end their contract and begin to look for a new tenant.
Letter sequence
If there has been no polite response then we suggest the following letter sequence, how long you leave the gaps between is up to you but if the gap is very short (24hrs or so) and it ends up in court you could be seen as being unreasonable – as a guide, we would suggest leaving around 3 to 5 days between letters.
- After the rent is 3 days late send them an informal polite letter letting them know.
- Send an informal letter asking if there is a problem, and how you could help
- Send a formal letter asking for a meeting
- Formal letter asking for the outstanding rent to be paid within a period (state what you feel is fair). Explain that failure to pay is serious and that non-payment could ultimately result in court action. It’s at this point we would suggest appointing us as an intermediary and inform them that we will be contacting, or visiting them to try and work out a fair solution – see the section – How We Could Help.
- If not using ourselves and the tenant has still not responded then the debt is 14 days old, we suggest personally sending (or instruct ourselves to send) them a further letter telling them that you intend to seek possession of your property if they don’t pay within 7 days.
- If they are still non-responsive then send (or instruct ourselves to send) them a further letter informing them that you are beginning court action to recover the property, court action should be commenced as soon after this letter as possible.
How we can help
At Lestons we feel that early intervention can work wonders, if the tenant is not responding then we would suggest you contact us, we would contact the tenant to arrange an appointment, or possible pop round and investigate the problem, and put forward a solution.
Possible solutions may involve
Visiting the guarantor (if there is one), explain the issue and try and get matters resolved without going to court, and incurring all the expenses involved with potential bailiffs etc
Contacting the DWP (if they are on benefits) to seek payments direct from their benefit.
If the tenant is working then asking them to sign what is, in effect a Direct Earnings Attachment (these are issued by the DWP to reclaim their debts), here the employer would send you their rent, along with some of the debts for missed payments direct from their wages.
Claiming possession of the property
By speaking to your tenant and sending them written requests for payment after giving them a reasonable time to pay, you will be in a good position to show that you have acted reasonably and tried to give the tenant the time and opportunity to pay their rent. If bailiffs are needed then we would advise accordingly.
Steps to take when beginning legal action
Once your tenant is two months into rent arrears, you can begin the process of legally evicting them. Under the Housing Act 1988, you can serve a Section 8 notice on the grounds of rent arrears. Your tenant may dispute the eviction, so you need to be ready with evidence of unpaid rent and your efforts to resolve the issue. If your tenant ignores the service of this notice, then you should not delay taking them to court.
Court proceedings: if your tenant doesn’t respond to any of your demands for rent, it is suggested that you pursue legal action to gain back your property and all the rent owed. You must collect all evidence to support your claim. Otherwise, you run the risk of the judge ruling against you. The court will decide whether to allow the tenant more time or allow the eviction. The tenant may state they never got the letters, that you have been verbally abusive or made discriminatory remarks and so on, these are designed to weaken your case.
This is where instructing a legal service provider such as ourselves can make all the difference, letters from ourselves are sent recorded delivery or hand-delivered by our staff, all communication would be non-emotional (we record all conversations, these can be played back or transcribed for the court). We would explain the situation in a non-confrontational manner to the court to resolve the issue.
If the judgment is n your favour but they still don’t pay then if the tenant is working we would ask the court to issue a warrant of Control, an Attachment of Earnings Order, a Third Party Debt order or a Charging Order, if going to court without our assistance you can fill these out yourself. – please see www.moneyclaimsuk.co.uk/PDFForms/EX321.pdf
How do you protect yourself as a landlord during this process?
You want to make sure that even though you ensure that you are protected here are a list of things you should remember.
- Make sure you have Landlord insurance as they could help with the financial burden of your tenant not paying rent.
- If the tenancy ends with rent still outstanding, you might be able to deduct this from the tenant’s deposit. Be sure you contact the tenancy deposit scheme holding your tenant’s deposit before taking any money for more advice.
- Even if your tenants don’t pay rent, you must ensure that you still don’t enter the property without permission, change the locks or sign up any new tenants until the previous ones have left.
Disclaimer
Please note – this advice is only liable for England and Wales. If you are in Scotland or Northern Ireland, please seek alternative routes.
5.21