If there is one thing a landlord can be certain about it is that rent arrears it will occur. Arrears have to be deal with quickly and efficiently to stop the situation becoming worse. The biggest decision facing landlords is how long do you wait to take action?
Tenants are very much like children and will push the boundaries often to see what they can or can not get away with. Consistently rent rent late, short paying or failing to pay rent at all are some of the boundaries regularly tested. Making it clear that rent must be paid in full on or before the due date is a step towards ensuring the rent is regularly paid on time.
Here are some simple steps to help manage rent arrears.
- Start all tenies on the 1st of the month. This may not seem important if you have just one or two properties but if you have a portfolio of properties it is easier to keep track of arrears if all the rents are due on the same day.
- If rent is still outstanding by the 5th of the month send a friendly reminder to the tenant about their arrears. Point out they are breaking the terms and conditions of the tenancy by missing the payments. Ask them to contact you if there are any problems so you can try to help resolve the issue.
- Ensure your tenancy agreements states that eviction can proceed if rent is 14 days in arrears.
- On the 15th of the month advise any tenants who still have rent arrears that unless an agreement is made to clear the arrears then eviction is probable under the terms and conditions of the tenancy.
- If you still have no response or agreement issue Section 21 Notice to Leave send a covering letter advising the tenant that still remains in the property provided rent arrears are clear and all future payments are made on or before the due date.
- Contact the Council and ask if the tenant is in receipt of LHA and if any payments have been made to the tenant. If the tenant has received payment but not paid it on to the landlord then a request can be made to the council for payment to go direct to the landlord without waiting for the full two months. Advise the council you have issued notice to leave.
- Keep in contact with the tenant during the notice period to try and resolve the issue.
- If at the end of the Section 21 notice period the rent is still outstanding apply to the court for repossession of the property. Legal costs can be added to outstanding rent.
- Once the tenant has been evicted and you have the final outstanding costs apply to the court for a CCJ (County Court Judgment) for the money owed to the landlord.
- Instruct a debt collection agency. There are some agencies who charge a commission only when they collect debts. This is a cost effective way to continue chasing outstanding CCJ's.
It is never pleasant dealing with rent arrears but by having an arrears system all tenants are aware that they are treated equally and of the repercussions of failing to make rental payments on time.