Being a landlord without a managing agent to support you can be hugely stressful… Responsibilities include problems at a property, tenant background checks, rules and regulations and various measures to protect both parties when it comes to returning deposits, sorting out deductions and any disagreements. Another key issue is rental arrears, which is when tenants don’t pay their rent on time, or at all. Missing just one month’s payment can have a detrimental effect on a landlord’s mortgage and ultimately their long-term financial goals. So, what can you do if you find yourself in this situation?
To prevent having to take legal action, start with calling your tenant and find out what the issue is, and remind them that they do need to pay on time as per their tenancy agreement. If after a few days things haven’t changed, post your first formal demand. At this point you need to request that the arrears are paid immediately and that moving forward all future rentals must be paid on time and in full or you may have to take legal action. Make sure you keep a record of all communication you make.
If things haven’t changed after two weeks, write to the tenant again, but include the guarantor this time if they have one, to explain that you will be seeking possession of the property if they don’t settle the arrears. This usually solves the problem.
However, if it gets to three weeks, you need to send another formal letter, confirming your intention to take legal action. After a month, the next rent will be due, and so the tenant will be two months in arrears. This means you are now able to claim possession of the property under the Housing Act 1998. You can serve a Section 8 notice which gives the tenant a further fourteen days to pay up.
Nothing? You’re now entitled to take legal action to seek possession. The courts can also make the tenants pay the arrears and reasonable costs incurred.
To prevent problems in the future, it’s worth using a managing agent, because they will simply handle everything on your behalf. It’s also worth paying a small premium for landlord’s insurance which can help protect you too.