Renting out a property can be an excellent investment. However, as a private landlord, there are some issues which commonly arise. Knowing how to deal with these can make your life easier. An issue which may often arise is tenants not paying the agreed-upon rent.
Tenants may occasionally go into rent arrears – that is, when they are not paying their rent on time. In fact, the most common dispute between landlords and tenants is late rent payments (source). This is a serious infraction and can result in eviction.
This guide will advise you on what to do when your tenants make late payments or miss a payment altogether.
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Read the most common reasons why tenants make late rent payments.
Find out whether you have the right to evict a tenant if they don’t pay rent.
Read the best practice for handling a tenant who doesn’t pay rent.
Find out when evicting your tenant is the best option.
Find out when you should consider getting legal advice and when court may be the best option.
Find out how you can avoid rent issues such as tenants paying rent late or missing rent payments.
We answer frequently asked questions on handling rent issues with tenants.
The most common reasons for late payments include the following:
If your tenants are struggling to pay the bills as well as their rent, offering a bills inclusive rent agreement can help this. Using a bill splitting service such as Split the Bills can make your life easier if you do choose to offer a bills-inclusive rent agreement.
Our service allows you to select your chosen services to include as part of the rent to your tenants. We will provide you with one monthly itemised bill to clearly manage your utilities. You can read more about our bill splitting service for landlords here.
You are entitled to evict a tenant who does not pay rent – however, it should only be done as a last resort to ensure there are no misunderstandings involved or a quick solution available. Before you decide to evict your tenant, you should take the following steps in our guide.
If a tenant has not paid rent, you will first want to ensure that it is not due to an error made by your bank or theirs. It could ruin your relationship if you accuse them of missing their payment date only to discover it is due to a clerical error.
Should this not be the case, you should contact your tenants and bring up the topic politely. This, again, will help you to maintain a good relationship. It could be that the reason for a missed payment is fixable, and you can simply arrange a new date for the rent to be paid.
If this doesn’t help, you should collect all records of payments and anything stating evidence of the agreed rental income so your tenant can’t argue against it. This helps to build a case in your favour.
Even after you have collected these details, your priority should be to compromise. It could be that your tenant is out of work or has had their hours reduced. This is especially pertinent in the current climate. If this is the case, consider temporarily reducing the rent until they get back on their feet.
Your tenant may also have a guarantor on their lease. If this is the case and you are unable to source the unpaid rent through your tenant, you may wish to contact the guarantor to resolve the matter. It is a good way to solve the situation amicably.
However, if all of these solutions fail, you may have to take your tenant to court in order to either claim the rent payments or evict them.
If your tenant doesn’t communicate with you, you can consider eviction. This can be a difficult process.
Should this situation arise when you are still in the fixed term of your contract, you should issue a Section 8 notice. A Section 8 notice will need to detail the grounds on which you are trying to reclaim possession of your property.
Should the fixed term of your tenancy agreement have come to an end (usually after six months), then you will need to issue a Section 21 notice. This is not fault-based, and therefore you do not need to specify why you want to take possession of your property back from your tenant. By serving a Section 21 notice, you also forego any right to outstanding rent.
Taking your tenant to court is a costly and lengthy process, which should be avoided where possible. However, if legal action is the route that you end up needing to take, there are some things you should expect. Firstly, you should make sure that you have followed due process up until this point, or else your case could be dismissed.
The court can order your tenant to leave the property, to allow them to stay so long as they pay the owed rent or order the tenants to pay you a specific amount. The court could also reach the decision that the tenants must leave your property and pay a specified amount which may or may not include your court fees and legal costs.
There are some ways in which you can prevent rent issues from occurring. If you carry out a full background check beforehand, you are more likely to get a quality tenant. Their references should include the last place they lived and their workplace.
Your rental agreement should be clear so that everyone understands the rights and responsibilities of both the landlord and the tenant. You can read more about making a tenancy agreement here.
You should always have a written/email copy of conversations – if you follow up in-person conversations in this way, then you have a paper trail that confirms understanding.
Lastly, if you feel there is an issue, contact tenants right away. This will help with open communication and stop any ill-feeling or financial issues from snowballing.
With Split the Bills, your duties as a landlord could run a lot more smoothly. We can combine your utilities and provide you with one streamlined bill, which can help you to incorporate bills into your rent and provide you with another income stream.
If your tenant is on Universal Credit, you can request that their rent be paid directly to you.
If your tenant passes away in the fixed term, their representative should step in. If this is not the case, you may consider the tenancy terminated.
You can reach an agreement to allow a rent break during this time; however, this is not legally necessary.
The current climate would still make it very hard for a tenant to terminate their lease, arguing that it has been frustrated.
If your tenant cannot pay arrears, a payment plan is a good way of keeping them in the property if they are otherwise good tenants.
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