As a landlord, it is likely that you’ve taken reasonable steps to ensure you have the most responsible and reliable tenants possible occupying your properties, but sometimes they may find themselves in circumstances beyond their control.
If you have a tenant who has fallen into rent arrears, it can be incredibly frustrating balancing your responsibilities regarding the wellbeing of your tenants with your need for stable rental income. Luckily, there are steps you can take to ensure both parties are protected if the worst does happen.
That’s why, at Kings Lettings, we have explained what to do if your tenants can’t pay their rent.
- KEEP A RECORD OF PAYMENTS
It is always prudent to keep a record of when rental payments are due, and on what date they have been paid by your tenants. This will give you a clear picture of the reliability of your tenants, as well as provide evidence of late payments to third parties.
If you do decide to repossess your property on the grounds that a tenant isn’t paying rent, you will need to provide a copy of all rent payment transactions.
- TALK TO YOUR TENANT
The first thing you should do if a tenant isn’t paying rent is to set up a friendly conversation where you can discuss the circumstances surrounding their late payment. They may have a perfectly reasonable explanation for going into arrears, and you can then negotiate an agreed rent repayment plan.
It is also encouraged that you consider third party mediation services during this period to aid in the process of reaching a mutually acceptable resolution.
Mediation services include:
You could also seek the services of your local council, Citizens Advice or consult a legal professional.
- WRITE A FORMAL LETTER TO YOUR TENANT
In addition to an informal discussion, you will also need to write a formal written demand for their rent after a few days of the missed payment.
If you have agreed on a rent repayment plan, it should be documented at this stage of formal communication.
If you haven’t managed to reach an agreement, or your tenant is avoiding discussing their arrears, then your letter should demand payment immediately and request that all future payments are made on time, otherwise you may be required to begin court proceedings to repossess the property should the following months rent go unpaid.
- TALK TO THEIR GUARANTOR
If your tenant continues to refuse rental payments, you will need to inform their guarantor, if they have one, by sending a formal letter. This should explain that the tenant hasn’t paid their rent. It will alert the guarantor that they may be liable for these payments in the coming months.
This letter should coincide with a second letter to your tenant, alerting them for a second time that their rent is due.
- CONTACT YOUR INSURANCE PROVIDER
Rent protection insurance covers rental income should your tenant be unable to pay it. This can cover up to 6-12 months missed rent, and access to solicitors to settle any legal disputes.
If your tenant goes into rent arrears then it is always best to notify your insurance provider as soon as you can after a missed payment, and alert them of all reasonable steps taken to mediate the situation.
For more information on rent protection and what it covers, take a look at our guide on Rent Protection and Legal Expenses Insurance.
- BEGIN THE PROCESS OF EVICTION
As much as you try to avoid it, there may come a time when eviction is the only option.
If your tenant is in two months of rent arrears, and has failed to make any attempt at paying, or discussing their options with you, then it may be time to begin the process of eviction.
You will need to serve a Section 8 Notice which will give tenants 2 months to vacate the property. You must specify your reason for seeking repossession of your property on the notice.
To serve a Section 8 Notice, you must fill in a Form 3: notice seeking possession of a property let on an assured tenancy or an assured agricultural occupancy. You can seek legal advice on how to correctly fill in this form, and how to present it to your tenants.
For further advice on how to protect your rental income, visit our guide on landlord insurance. Alternatively, if you’re considering becoming a landlord, take a look at our First Time Landlords Guide, Landlord FAQs or contact Kings Lettings for professional, friendly guidance.
KINGS LETTINGS, 103 HIGH STREET, MAIDENHEAD, BERKSHIRE, SL6 1JX
Lettings and property management offices in London, Reading, Maidenhead, Staines & Windsor.
T: +44 (0)16 2863 2188 | E: MAIDENHEAD@KINGS-LETTINGS.CO.UK
