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How to deal with tenants in rent arrears

26th December 2016 Print

Unpaid rent arrears looks set to be one of the biggest problems facing the housing market in 2017.

The Birmingham Mail recently reported a survey which showed that as many as 62 per cent of landlords were experiencing some form of rent arrears, with almost 10 per cent of all tenants falling behind in their rent payments in August 2016.

It’s clearly a widespread issue and those figures alone should be enough to make a landlord sit up and take notice.

But what do you do if your tenant is in arrears?

Protect yourself in the first place

First things first, you don’t have to wait until this happens to do anything about it. You are able to take out landlord insurance that includes protection for lost income through rent arrears. Your policy can also cover legal costs should you end up having to pursue a case through the courts. This can help to give you peace of mind and ensure you aren’t left out of pocket.

Keep your records up to date

Develop a system where you can track all the payments made for your properties. As Which? notes, this is especially useful to keep on top of things when you have more than one tenant. Also, if things get the stage where you have to go to court then you will need to have your paperwork to hand to prove your case.  

Get in touch with the tenant

If the rent isn’t paid within a few days, then you need to engage in formal contact with your tenant. This should be a letter and ought to be posted first class or hand delivered. Again, having this in writing will help should the issue escalate. The letter should be clear, fair, request the payment is made and make clear that you will pursue payment in the courts should it not be received. You should aim to give your tenant every chance to rectify the situation, which would be preferable for all concerned. If you hear nothing within 14 days, then you should follow this up with a further letter re-iterating the points above.

Take it to the court

Your first step when it comes to court action, as this blog by Simple Landlords states, is to get a county court judgement (CCJ), which can be done using the Government Money Claim Online Service. The fee for this will be on a sliding scale in line with the size of the claim.

After that, it’s all about enforcement and calling on the services of a bailiff. This blog suggest that a high court bailiff will be a more effective route than enlisting the services of a county court bailiff.

Take back your property

If your tenant doesn’t pay their rent then you’ll also want to reclaim your property. If, after making formal contact, you hear nothing from them in 21 days you should contact them again to notify the tenant of your intentions.

If your tenant is two months in arrears you have the right, under the Housing Act 1988, to undertake action that will regain possession of your property. 

The same article referenced earlier from Which? explains how serving a ‘section 8 notice’ is the next step, which informs them that you are prepared to take court action to regain possession.

It’s never nice to have to chase what you’re owed but if you keep a cool head, clear records and act in a proper and professional way you should be able to use the avenues open to you to get what is rightfully yours.