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Five tips for dealing with rent arrears

MoneyWhat do you do if your tenant suddenly stops paying his rent?

This can be a big problem for landlords. A tenant loses his job, or perhaps a couple split up, leaving the partner with no job in the property, and suddenly you have no income.

Here are some tips for you.

1. Take action immediately

This can be a letter, a phone call, or perhaps a visit. The sooner you deal with the problem, the more likely it is that they will pay.

If you let things drift for months, hoping that the tenant will do something, the rent arrears will get so huge that the tenant will never be able to pay them. Also if  they know you will be on to them quickly, they are more likely to give their rent payments priority.

2. Try to reach some sort of agreement.

Court action should always be a last resort. Maybe there is something you can do to help, such as let the tenant pay more frequently in smaller payments. Or perhaps, in the case of a good tenant you would be sorry to lose, you can give a small rent reduction.

3. If you reach agreement make sure it is put in writing

A letter is sufficient. It should:

  • set out the agreement
  • state clearly when the arrangement will end (if it is not permanent), and
  • say what will happen if the tenant fails to comply. This will often be court action

4. Serve any relevant possession notices even if you reach agreement

You do not have to use them, and you should make it clear to the tenant that you won’t use them – so long as he keeps to the agreement.  But serving them now will save time later, if the tenant does not keep to his agreement.  This in itself will be an incentive to the tenant to pay promptly.

5. Don’t keep giving the tenant second chances

I have known landlords left with huge rent arrears through trusting tenants when they say they will pay later, and ‘just want a bit more time’.

You are not running a housing charity.  If the tenants are not paying they should be evicted. Some are all to willing to take advantage of their landlords good nature.

If the tenant fails to pay you should serve notice (if you have not done this already) and then move to bringing court action. Tell them that if they pay you will cancel the claim (if you are willing to do this) but not otherwise. If they want to stay they will have to find the money.

The Landlord Law Rent Arrears Action Plan

If you have a tenant who is failing to pay rent, and are uncertain what to do, you need my rent arrears action plan. This is a special section on my main Landlord Law website with help and guidance for landlords whose tenants are not paying rent. As well as information, the plan also has letters, checklists and possession notices.

Click here for a list of the other services available via the site.

Photo by BlatentWorld.com

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Important note. If you are reading an old post, remember that the law may have changed since it was written.




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2 Responses to Five tips for dealing with rent arrears

  1. Hello Tessa,
    Another interesting blogg, I have a question in respect to point 4 above. It is my understanding that a (fixed term)section 21 can be issued to the tenant anytime ‘after’ the tenants deposit has been registered (let us say with the DPS) this being the case the section 21 is issued ‘just in case’.
    Now let us assume all has gone well with the tenancy to this point and it has now moved to a periodic tenancy and let us say we are some 18months down the line from the initial date the tenancy began and ‘then’ something goes wrong with the tenancy or the Landlord simply wants their property back my understanding is that the Landlord can STILL rely on the (fixed term) section 21 issued all those months back shortly after the tenants first moved in.
    My question is that if this be the case surely a Landlord cannot say well I issued you with a section 21 18 months ago (tenant having probably forgot)so I have already giving you the proper 2 months notice that I need to give so I want you to leave by say this Friday effectively giving the tenant possibly no time at all to make arrangements to move out.
    Can you tell me what the actual rule is here and what kind of ‘notice’ a tenant would need to be given for the original section 21 notice to still remain effective if you rely on it in a court of law as I assume this could be seen as unfair in its implementation and that if the Landlord got heavy and forced them out thinking they were within their rights with what effectivly could be little or no notice in reality this might cause problems for the Landlord. What do you think?
    Thanks Tessa

  2. Peter, you can issue proceedings based on a (valid) section 21 notice at any time after the notice period has expired. The notice remains active indefinitely until it is cancelled by the landlord giving the tenant a new tenancy agreement (after which he will have to give a new s21 notice).

    If the notice period expired a long time ago, practically no doubt the landlord would ask the tenant to go before issuing legal proceedings, but legally he does not have to. In fact as possession proceedings take such a long time to obtain he is probably best advised not to give them too long.

    The tenant is not legally obliged to vacate the property until a possession order has been obtained, so as this takes about two months (sometimes longer) this will give them plenty of time to find somewhere else to go.

    However, if the tenants are still having problems finding somewhere after the order has been made, they can apply to the court for more time, and the Judge can (if he considers that otherwise they will suffer exceptional hardship) give them up to six weeks from the date of the court order.




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About the post author:

Tessa Shepperson

Tessa is a lawyer specialising in residential landlord and tenant law. She runs the Landlord Law website (now in its 12th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google



The Landlord Law Blog from Tessa Shepperson

Tessa is an English lawyer specialising in residential landlord and tenant law.


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