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What to do if tenants owe you rent

26 October 2015 / By: / Under: Finance

Here’s a real-life situation the UK’s increasing number of private landlords must consider: What action would you take if the rent due from a tenant failed to reach your bank account on the day specified in the shorthold tenancy agreement?

A. Hope a bank error has occurred and keep your fingers crossed the money will appear in the next day or two?

B. Go round to your rental property, hammer loudly on the door and demand payment in full immediately?

C. Start drafting a firm but polite letter to the tenant asking for the arrears to be paid immediately, payments to be maintained in the future and that you will consider making an application for possession to the court if more than two months arrears accrues.

While the majority of buy-to-let investors and accidental landlords plump for option A or B, when you are chasing rent arrears it is vitally important to keep detailed records of when payments are due and when they’re paid.

This is particularly the case if the tenancy is shared by two or more people, who are equally responsible for clearing any arrears. The records you keep will also be needed if you eventually apply to the court for possession.

If the rent hasn’t been paid for several days then the first step is to send the tenant a letter, by first class post or hand delivery, asking for the arrears to be paid immediately.

If the rent still hasn’t arrived in your bank account after 14 days then send another letter to the tenant informing them that you intend to take the matter further and seek possession of your rental property. If the tenant has provided a guarantor, you should also write to the guarantor informing them that the terms of the AST agreement have been breached.

The good news is that letters of this kind are often enough to ensure that the arrears are paid.

However, if after 21 days you still haven’t received rent you will need send a final letter – to both the tenant and guarantor – confirming that you intention to take legal action.

If the rent hasn’t been paid for a month, and another month’s rent becomes due, your tenant can officially be classified as being two months in arrears and legal action to evict them can be launched under the Housing Act 1988.

Although the law allows tenants who haven’t paid their rent to be evicted, and for courts to make a judgement against a tenant for the arrears of rent and reasonable costs incurred, the legal process can be painfully slow and is unlikely to relieve the frustration that chasing overdue payments of any kind causes.

While confronting the tenant can make a landlord feel better, it can harm your chances of winning a legal case.

One way to safeguard against the ever-present danger of a tenant failing to pay their rent on time, is to seek the help of Assetgrove.

Our rent guarantee scheme is the ultimate way to get ‘hassle free’ letting. Since 1975, we’ve been working with landlords to take the stress out of managing their rental portfolio by ensuring they receive fixed monthly payments even if a property is vacant.

Assetgrove offers up to five years guaranteed rent and will manage every single aspect of the tenancy during this period – with no monthly fees, commissions or hidden surprises to pay for. This means we take care of everything – ensuring our landlords have complete peace of mind.

For more information on how you can ensure the rent you are due arrives on time every month and escape the day-to-day management of your rental property, contact Assetgrove today.

 

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