Rent arrears and eviction

Many first time landlords can get a little carried away with the fact that they have a new rental property. They have a tenant, this property is the ‘first of many’ that will bring a new life style with financial security through others effectively ‘paying the mortgage’ for the landlord.

Unfortunately that is where the dream starts and ends for some landlords. If you are letting out your residential property you need to ensure that you keep on top of the rent collection. This is, after all, the reason why they are living in your property – for you to collect their rent.

It is essential that landlords have an easy and open communication channel with their tenants, so, if there is a default in the rental payment then the landlord can immediately follow up on this and enquire as to why the rent has not been paid. It may be some relatively minor reason such as a bank error, they were paid their wages late by their employer, in other words, a situation which will resolve itself about as quickly as it arose.

If on the other hand the tenant has lost their job, has been made redundant or if the tenant simply hasn’t paid it for unknown reasons then the landlord need to have dialogue with the tenant to find out what the intentions are. If the tenant has previously been a reliable payer and is looking after then property then the landlord is best advised to negotiate with the tenant. In some circumstances it may be mutually beneficial for the landlord to accept a lower rent for a certain time to allow the tenant to find another job or to recover financially. This course of action will retain the tenant who has previously been a good one, it avoids fees and the hassle of finding a new tenant (who may not pay the rent!) and avoids void periods.

If an agreement with the tenant can be reached then the agreement should be made in writing, preferably by the landlord writing a letter to the tenant giving details of their discussion and the agreement that was made. Depending on the outcome of the discussions and on the confidence the landlord has with the tenant paying future rent, it may be advisory to issue a Section 21 Notice on the tenant. The landlord will need to ensure this is done in a timely manner to keep it legal.

A ‘Section 21 Notice to Quit’ is so called because it operates under the Housing Act 1988 and gives the tenant notice to leave the property at the end of an Assured Shorthold Tenancy (AST) and gives the landlord the right to regain control of the property at the end of the AST.

The most important thing to remember for a new landlord is the fact that the situation regarding rent owing will only get worse if there is no dialogue in an attempt to resolve it. So, make sure that you check your bank on ‘rent day’ and deal with it immediately if the correct amount of rent is no there. If you are dealing via a professional letting agent the same is true, don’t rely on the agent to contact you – show them that you are the one on the ball and get them to deal with it. If you cannot find a resolution within 2 months you are unlikely to be able to do so. Once you have reached the point of no return with a tenant you need to be firm with your resolve and if you need to evict the tenant then do so. Remember, for every good tenant (and they are indeed priceless) there is also a very bad tenant.

Take professional advice
If you are having trouble with your tenant not paying their rent then the best thing to do is to take advice from somebody who knows exactly what to do. If you are using a decent letting agent that knows the legal intricacies of the landlord and tenant relationship then your first communication should be with them. If they are unable to help (and some won’t be) then do some research yourself and then speak to a solicitor. Or you may have a legal advice line with your” insurance policy”:/insurance.php

Harassment of tenants
Some tenants will often promise to pay on a certain date knowing they have no intention of paying their rent. Dealing with individuals that are hell bent on stringing you along can be very frustrating indeed. It is worth noting however that however frustrating it may be, it is a criminal offence to harass or try to intimidate your tenants. You must not attempt to evict your tenants other than by court action.

Rent guarantee / rent default insurance
Insurance cover for rent guarantee and rent default insurance is available, usually as an add-on to the main insurance policy that covers the let property. Insurers are willing to issue a policy subject to policy terms and conditions such as credit checks, written references etc. LINK TO BICKERS INSURANCE

Squatting in residential Property
Squatting in residential property in the UK is now a criminal offence and can lead to 6 months in prison, a £5,000 fine, or both. A squatter is a person who enters a residential building for the purposes of living there without permission from the owner.

For the avoidance of doubt, a legitimate tenant who fails to pay rent to the landlord, or fails to pay rent is not classed as a squatter and is therefore not committing an offence. In these circumstances appropriate negotiation needs to be taken with the tenant, or via the eviction process if it is clear that no progress can be made.

The information provided on this page is general advice and it is essential that you take proper, legal and professional advice prior to acting on any information contained herein. The website owners take no responsibility for any actions taken or otherwise as a result of this information.