A Simple Guide to Managing Rent Arrears
Here are a few facts about the payment and non-payment of rent:
- Rent payment dates come around with monotonous regularity
- The larger the overdue rent amount the less likely it is to be paid
- If landlords turn a blind eye to overdue rent the tenant will do the same
- Chasing overdue rent through the County Court can be done quickly and easily
- There is no point in suing a tenant who does not have the financial resources to pay
So what can be done about all this?
When preparing to let a property a landlord has two major concerns:
- Does this prospective tenant have the ability to pay the rent on time each month?
- Will this tenant look after and maintain my property?
For the purposes of this guide we will focus on the first question. The Landlord Advice Team are often amazed by the number of landlords who do not carry out a credit check before offering a tenancy. This is amazing when an RLA credit check only costs £12.00 and the credit report is received back immediately. This report will provide an early snapshot of a prospective tenant's ability to pay the rent. If any doubts are raised by the report, further enquiries such as requesting sight of recent bank statements and proof of earnings can be made before committing to the tenancy. Increasingly, many landlords cover the cost of the credit check and the cost of protecting the tenant's deposit by including an administration charge of for example £25.00 on the tenancy agreement.
When rent has not been paid on time the landlord should be actively doing what he can to contact the tenant. This might involve telephoning, texting, writing or e-mailing the tenant. There are a range of standard rent arrears letters available to members on the RLA's website. You will find these under DOCS then the sub heading MANAGING A TENANCY and then follow the link to LANDLORD LETTER TEMPLATES. All these letters can be amended or personalised.
If a tenant receiving benefits owes at least two full months rent, write to the local council, enclosing an up to date statement of rent and request that any further benefits are paid direct to the landlord from the date of that letter. At any point during the tenancy or after the tenant has moved out, a landlord can pursue a tenant through the Small Claims Court to recover any overdue rent. This can be easily done by going to the Moneyclaim website. A landlord has six years in which to take steps to recover any monies owed.