This is the third article in my series of tenancy and property management tips for landlords.
Hopefully, if you have taken on the points in my previous posts, we should not be getting to the stage of what happens when the tenant stops paying rent. However and unfortunately, even if you follow the letter to the t, there are many reasons out of our control why the tenant would default on rent.
It all starts with a check of your bank statement and the rent does not seem to have been paid?
Tip # 3 – Stay Calm
I would like to take a pause and remind you of my tip #3 – Stay calm and act professionally. This is ‘business’, try not to get too emotionally involved. We call this Landlord Rage at Landlord Action, which is when a landlord, can make regrettable mistakes in this process.
Always give your tenant the opportunity to pay their rent. Try to understand what issues they are experiencing, i.e. job loss, marital split etc and work out a plan. It’s better to know this now rather than 4 months down the line when the debt has become too big for them to manage.
For example, if your rent is due on the 1st September, by the time you come to 2nd October, they will be 2 months in arrears (as rent is paid in advance) and that’s when you will be ready to serve a Section 8 Notice for breach of tenancy.
You would base your Notice on Ground 8 which is a mandatory ground where the court dealing with the case would pass judgement to grant a possession order.
Between the 1st September and 1st October, you can write letters to your tenant reminding them that they are overdue and advise ways in which to settle. Be advised that if you persistently call the tenant or turn up to the property without giving the required 24 hours’ notice in writing, this could be deemed as harassment. We have had cases where tenants have filed these defences at court.
Once your Section 8 Notice has expired, you have to give at least 14 days’ notice from the date of service. Your tenant may contact you and make part payment, so you can suspend further action as long as they pay on time. If the tenant has vacated the property, I would see this as a good result, as you have vacant possession and you have avoided the loss of a months’ of non-payment and legal fees which can escalate into the thousands of pounds. At this point, it may be worthwhile mentioning the importance of rent guarantee insurance with legal expenses the next time you have a vacant property and need to find tenants.
I had one landlord a week ago, calling me, asking us to serve a Section 8 Notice as he had 15 months’ rent arrears, I still get astounded now and that’s after 28,000 instructions. If your tenant is in rent arrears and you need some help, please get in touch. I would be happy to talk through your case.
If you have been involved in rent arrears, how did you overcome it? Please share your comments below.