In This Guide
Administration
Being a landlord
Buy to let investment
Choosing the property
Finding tenants
Letting property
Lettings agents
Levels of service
Preparing the property
Problem tenants
1. Introduction
2. Non payment of rent
3. Evicting tenants
4. Grounds for possession
Tenancy
Problem tenants
Non payment of rent
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The problem of rent arrears should be addressed as soon as it rears its ugly head. You need to take the course of action that will best help you achieve a positive outcome - either the payment of the arrears or the fast repossession of the property. To help you achieve this in the most effective way possible, it is worth consulting your lettings agent, and if necessary a solicitor.
There are three main things that you can do to help minimise the
risk of non-payment of rent:
- Use standing orders or direct debits for rent payments, as
the inconvenience of shutting them down is a disincentive to
tenants who are thinking of dodging rent..
- Request that the tenant use a guarantor if the tenant's ability
to pay the rent looks in any way doubtful. The guarantor will
usually be someone fairly close to the tenant, and most people
would think twice about forcibly passing on liabilities to a
family member, friend or other acquaintance.
- You should make sure that you include a non-payment of rent clause in the tenancy agreement. This should make provision for a charge if the tenant fails to pay a rent instalment within 7 days of the due date. It should also include details of charges that will be incurred for subsequent reminder letters whilst the rent remains in arrears.
Here is the process used by one major residential lettings agent
to recover rent that is overdue. It is not a bad model to follow
if you are letting privately:
- 7 days after rent is due:
Letter sent out informing tenant of amount and due date of arrears.
This letter carries a charge of £30 and advises the tenant that
there will be a charge of £20 for any subsequent letters that
are required to be sent whilst the tenant remains in arrears.
- 14 days after rent is due:
A further letter is sent to the tenant at a charge of £20. This
letter threatens legal proceedings and outlines the repossession
proceedings. At the same time, a separate letter is sent to
the guarantor (if there is one) to remind them of their obligations
and responsibilities and requesting that they encourage the
tenant to pay the overdue rent.
- 21 days after rent is due:
A visit is made to the property in an attempt to meet with the
tenants and persuade them to pay the overdue rent. If this is
unsuccessful, then a further letter will be sent to the tenant
advising them that this is the last opportunity to pay the rent
before possession proceedings are instigated.
- 28 days after the rent is due: Possession proceedings are usually considered at this point, though a mandatory possession order is unlikely to be granted until rent has been in arrears for two months.
- You should take legal advice before constructing similar
letters yourself.
- Often, non payment of rent is due to administrative errors
in the setting up of standing orders. This can take up to a
week to resolve, and it is advisable to show goodwill when dealing
with such instances.
- Most tenancies are operated under joint and several liability,
meaning that even if only one tenant is defaulting, it should
be treated as though all tenants are. You are legally entitled
to take action against all of the other tenants to recover money
from one defaulting tenant.
- On some occasions, tenants refuse to pay due to unhappiness with the condition of the property. By law, tenants may only refuse to pay the rent or reduce payments where the problem is a safety or health matter, such as those concerning: Structural repairs, draining, gutters, external pipes, water, gas, electricity, sanitation, heating and hot water.
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