The effect of sudden rent arrears
If you are a landlord, it can be catastrophic if you tenant stops paying your rent.
After all, you have to carry on paying your mortgage, the insurance premiums, maybe Council tax and untilities and all the other outgoings you may have.
They are not going to let you off payment just because your tenant is not paying rent!
But often landlords, particularly new landlords, have no idea what to do. How can you deal most effectively with this disaster? How can you get your tenant paying rent again and keep paying rent?
Dealing with rent arrears
You need to remember that your tenant will no doubt have lots of creditors all calling for a part of his limited resources. He will probably pay first the one which is shouting loudest!
So you need to make your tenant decide to pay YOU first, before all the others. How can you do this?
- Get on to it promptly. Ring him up or write to him the day after he fails to pay. Let him know that your eye is on him
- Be sympathetic. Let him know that you understand his situation, and will do what you can to help. For example by allowing him to spread the payments, or maybe change the payment date. Or even (for the best tenants who you don’t want to lose) a small temporary rent reduction
- Warn him of the dangers of non payment. The risk of being made homeless and the effect this will have on his earning capacity – to say nothing of family life. The negative effect also of having a CCJ registered against his name. That sort of thing
- Make it clear that you WILL take action if necessary, even though you are sympathetic. You cannot allow him to stay in the property rent free, and will have no alternative but to take steps leading to eviction if the arrears situation is not dealt with
Generally if you take this approach, if the tenant is able to pay rent, he will.
And if your tenant STILL does not pay his rent?
Then I suggest you move as swiftly as possible towards eviction. It is neither right nor necessary for you to subsidise impecunious tenants who won’t even make an effort to pay your rent.
For more information
You will find quite a bit of guidance on this blog.
But your best guide will be my Rent Arrears Action plan which I wrote specifically to help landlords in this position, and give them a plan of action to follow. It contains guidance, letters, eviction notices and checklists.
Find out more >> here.