Home  Landlords  My tenant is not paying rent. What can I do?

Category: Landlords

My tenant is not paying rent. What can I do?

Reading Time: 6 Mins Read

Possibly the biggest expectation any landlord has is that their tenants will pay their rent on time and in full. The repercussions of a tenant who defaults on their rent can range from the annoying to the downright serious – if you are left struggling to pay your buy to let mortgage on the property, for example.

The main advice when it comes to tenants and rent is to be on top of the situation and act quickly. It is also important to understand the eviction process and what the law says about tenants’ rights.

Be prepared

Even before there is a problem, it’s a good idea to have efficient systems in place with proper documentation. Keep a record of when rental payments are due and paid, especially if you have multiple tenants, and send dated receipts each month. If you do decide to start eviction proceedings, you’ll need copies of all rent payment transactions.

Talk to your tenants

Don’t hang on, hoping they’ll get around to paying their rent. Have the conversation to find out why they haven’t paid by the due date. They may have a short-term issue that has affected their cash flow, and together you may be able to find a solution. If they have previously been a good tenant, it may be worth being flexible here. You could also suggest they explore other sources of help – applying for housing benefits or getting debt advice from an organisation such as Stepchange.

If your tenant can’t afford to pay, and is willing to leave the property, it may be best to accept the loss of rent and let them break their contract and move out so you can begin finding new tenants.

What if this doesn’t work?

If this isn’t working or they won’t return your calls, send your tenant a formal written demand, ideally by hand-delivered mail. In your letter, ask for the outstanding arrears to be paid immediately, and that future rent is paid in full on the correct day. Explain that failing to pay could result in court action.

Always remember to act professionally, staying calm and reasonable. Otherwise your tenants could claim that you have harassed them. Even if your tenants owe you rent, you must not enter the property without permission, remove their belongings or change the locks – you need to go through the proper court process.

If the tenant still hasn’t paid 14 days after the rent is due, send a further letter telling them that if they don’t pay, you intend to seek possession of your property. If your tenant has a guarantor, you should write to them too at this stage.

After 21 days of the rent being due, send another letter to the tenant – and to the guarantor if applicable.

Once the rent is a month overdue, and the following month’s rent is now due, your tenant is regarded as being two months in arrears. At this point you can begin the process of seeking possession of your property.

Section 8 or Section 21 notice?

Under the Housing Act 1988, there are two routes you can take to evicting tenants with assured shorthold tenancies – a Section 8 or a Section 21 notice.

When to use Section 8

By failing to pay their rent, your tenant has broken the terms of their tenancy agreement, meaning you can serve them a Section 8 notice at any point in the tenancy. Your tenant may dispute the eviction, so you need to be ready with evidence of unpaid rent and your efforts to resolve the issue.

When to use Section 21

A Section 21 notice isn’t technically an eviction. Serving a Section 21 notice means you are telling your tenant that you intend to regain possession of the property. Currently, you can use Section 21 to give notice of possession, without providing a reason, at the end of a fixed term tenancy or at any time during a periodic tenancy with no fixed end date.

You can’t serve a Section 21 notice during the first four months of a tenancy or if you have failed to meet certain obligations as a landlord, such as protecting your tenant’s deposit in a government-backed scheme and giving your tenant copies of the property’s energy performance certificate, gas safety certificate or the government’s How to Rent Guide. Find out more on the government website.

If you aren’t sure which notice to serve, you should get proper legal advice.

Bear in mind that the government has pledged to end Section 21 evictions during this parliament – it is unclear at this stage when this will happen and what, if anything, will replace them.

Taking your tenant to court

As your tenant has not responded to your attempts to get them to pay their rent, you are entitled to take legal action to seek possession of your property. You can also make a claim against your tenant for the arrears and reasonable costs incurred.

Make sure you have collected all the evidence that you have followed the correct process, otherwise the judge may rule against you.

The court could order the tenant to leave the property by a certain date and pay you a specified amount to cover arrears and legal fees. Or, it may allow the tenant to stay as long as they pay what they owe and abide by the conditions of the tenancy agreement.

Insurance cover

Landlord insurance products are available to cover you for loss of rent and the costs involved in evicting a tenant. This might be worth considering if you would struggle financially should your tenant go into arrears.

Using the deposit

Your tenant’s security deposit should have been placed in a government-backed scheme. You can make a claim for the rent you are owed from the scheme – although it may not cover the whole amount. You will need to provide proof that the rent is owing.

If you are looking for an alternative to managing a tenancy yourself, or through estate agents, Assetgrove’s guaranteed rent scheme provides you with a fixed income for up to five years, plus we take care of the stresses and strains of renting out property, including dealing with arrears. Find out more or contact us today.

Neil Jennings

Neil background is in marketing and business development and has over 20 years experience in the field. He runs Asset Grove and is involved in the marketing strategy for most of our campaigns.

Related Post

When should I change the locks on my buy-to-let property?
Updates: 4 Mins Read
When should I change the locks on my buy-to-let property?

Should landlords change the locks at the end of a tenancy? Is it a good idea for landlords to change the locks between tenancies? Read this article to get some advice on when to change the locks on your buy-to-let property.

What is rent guarantee insurance?
Updates: 4 Mins Read
What is rent guarantee insurance?

Rent guarantee insurance provides cover for landlords, should their tenants fail to pay their rent. Unlike building insurance, it’s not a legal requirement to take

Looking ahead – how will landlords invest in 2020?
Updates: 2 Mins Read
Looking ahead – how will landlords invest in 2020?

Investing in houses of multiple occupation (HMOs) will be the preferred strategy of landlords who plan to add to their portfolios in 2020, according to