This is a question to the blog clinic from Harry (not his real name), who is a landlord in England.
I’m trying to get my head around when a tenant falls into arrears. For example, we asked for our tenants to pay in advance on the 1st of the month, but the tenants said they can’t do the 1st as they don’t get paid till the 12th of the month. Which we agreed to. However, there’s been times when they haven’t paid on the 12th.
So my question is – when does their rent fall into arrears? If they don’t pay on the 12th of the month, do they fall into arrears for that month or is it the end of that month or the 12th of the next month?
Answer
Under the general law, rent is payable in arrears (see here for a discussion about why this is the case).
In most cases, though, rent will be payable in advance because the tenant has signed a tenancy agreement saying this.
Your tenancy agreement clause
From what you have said it looks as if this is the case with your tenancy. The rent is payable in advance on the first day of the month.
In which case (if you had not agreed otherwise), if the tenant has not paid by midnight on the 1st, on the 2nd day of the month, he will be in arrears. As the rent is payable in advance, he does not have to have lived in the property for the period of time the rent relates to.
Agreement to amend the date of payment
At the moment, though, you have agreed with your tenants that they can pay their rent on the 12th day of each month. So, if this agreement is still current, then they will be in arrears after midnight on the 12th if the rent has not been received by then. So, from the morning of the 13th.
You don’t say though how you reached this agreement, whether it was agreed or confirmed in writing (and if so what exactly was said) or whether it was just an oral agreement (for example, in a telephone call).
Confirmation in writing
It is generally a good idea to allow tenants to pay rent on the day their salary is paid. However, my advice to landlords in this situation is that:
- You should confirm the agreement in writing, eg in a letter or email, and
- The permission should be on the basis that the tenant pays on the new date
The letter or email should be on the following lines:
- It should confirm your agreement that the rent payment date be changed from [original date] to [new date].
- It should go on to say that the agreement is conditional upon payment being made promptly by that date, and
- That if rent is not paid on time, the agreement will end, and the rent payment date will revert to [original date]
- That they should contact you if they are in financial difficulties and are not able to pay on the new date
- That the agreement will not change the tenancy period, it is simply an agreement about the date rent is payable.
This will make it crystal clear what has been agreed.
The last point is there because sometimes people think that the tenancy agreement needs to be amended and/or that the tenancy agreement term will be changed in some way by this sort of agreement.
However, this is not the case. Think of it like this
- The tenancy requires the rent to be paid one month in advance
- This agreement is just providing that the ‘advance’ period is changed from one month to [whatever your agreement provides]. In your case this is one month less 12 days.
If the tenants fail to pay on the new date
You say that sometimes your tenants fail to pay on the 12th. I think it is arguable that the agreement can be deemed to have lapsed if this happens, even if this was not set out in a letter.
So, for example, it might be a good idea to write to them saying that you are concerned that despite your agreement to change the date of payment, they have not paid and that unless they rectify this and bring payments up to date within 7 days, you will consider the agreement at an end.
If they still fail to pay, consider serving a section 8 notice.
Helping tenants to pay
Alternatively, if you are on good terms with them, you could offer to help them. We have a special kit, the Helping Tenants in Arrears Kit, to assist landlords in this position who want to help their tenants to pay.
There is also a lot of help and guidance for Landlord Law members in our Rent Arrears Action Plan.