Getting your rent on time. Dealing with rent arrears.

Regardless of their situation, all landlords want to be paid rent when it’s due, without having to spend time chasing. But how do you ensure this happens? We look through the best ways to get your rent paid, on time, every time.

Good tenant – landlord relationship.

It is important to build up a friendly, professional relationship with your tenant. Redundancy, unemployment or ill health can strike anyone and you want to make sure that your tenant notifies you of any changes that may affect their ability to pay rent, so you can come up with a contingency plan.

Meet your tenant face to face to face. A tenant is more likely to understand the effects of not paying rent if they can see you are a person with an investment to maintain, rather than just a bank account. If your tenant contacts you- make sure you respond in a timely fashion and get repairs carried out quickly if needed. This will go a long way to showing the tenant that you are a hands-on landlord.

Knowing the warning signs that your tenant may be struggling to pay rent may help you to reach an agreement before it gets too bad. If you notice your tenant is consistently late find out the reasons why: it may be as simple as changing the payment date to make sure it’s paid on time. If you usually have good communication with your tenant and they suddenly stop responding and rent stops coming in, this is a big warning sign. If your attempts to get in contact with the tenant don’t work, it may be time to start sending official letters warning that rent needs to be paid otherwise you’ll need to start the eviction process.

Reasons for rent arrears.

There will be times when a tenant is not getting along with their landlord and decide to withhold rent, but most of the time there is a genuine reason that has impacted on their finances. Tenants may fall into arrears if :
– They lose their job
– They have an unexpected drop in their hours or their wages
– Their overall cost of living means buying essentials leaves them short when it comes to paying the rent
– There is a change in their life circumstances which suddenly impacts their household income, such as a relationship breaking up or a joint tenant moving out.
– Housing benefit payments have been reduced
– The rent has been increased and the increased payments are not affordable

Tackling rent arrears

It’s always worrying when a tenant falls behind with their rent, but you should think twice before starting the eviction process which can be long, expensive and stressful. First, you should try to reach an amicable solution. Find out why they’ve stopped paying their rent, maybe they’ve lost their job or they’re ill and need some extra time to get back on their feet. If this is the case, perhaps you could set up a plan for them to pay off the rent arrears gradually. Perhaps they’re just bad at managing their money, in which case you might suggest setting up a weekly or monthly standing order, so their rent is paid automatically on the day they receive their salary.
Obviously, if you can’t reach an agreement with your tenant, you’ll have to start the eviction process. The simplest way is to issue a Section 21 notice giving the tenants two months to leave. However, if your tenant is still within the fixed term of their contract, or it’s been less than four months since they moved in, you’ll have to serve a Section 8 notice, but the tenant could contest this, delaying the eviction. Remember, if the tenant refuses to leave, only a possession order and a bailiff can evict them, so you must follow the correct legal procedures.

Protect yourself from rent arrears.

The best way to deal with rent arrears is to be pre-emptive. Thorough referencing will ensure the tenants don’t have a previous history of rent arrears or late payments and a credit check will reveal if they have had problems with debt in the past. Inventories are also very important. A tenant’s deposit is taken as security for and damage to the property at the end of the tenancy or to pay for missed rent. Ensuring you have a thorough, professional, third party inventory will make it easier to make deductions at the end of the tenancy. Also make sure that you protect the deposit in an approved scheme and serve the Prescribed Information, otherwise you will not be able to make any deductions from the deposit, and could even end up paying out to the tenant. You should also ensure you have watertight tenancy agreement, which outlines how much the rent is and when it should be paid. Asking the tenant to set up a direct debit for the rent payment before they move in will also help avoid rent arrears. You can also take out Rent Protection Insurance, which, depending on the insurer’s policy, will cover you for missed rental payments and ensure you can still get mortgage payments made. Most policies also cover you for the legal expenses associated with evicting a tenant.

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