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landlords
Steps to Take if Your Tenant is Not Paying Rent: A Guide for Putney Landlords
Published 5th August
minute read
Being a landlord has many benefits such as earning a passive income and providing a comfortable retirement but there are drawbacks too. One of the biggest issues that landlords face is when a tenant stops paying rent. This can be a stressful situation, especially for landlords who do not have landlord insurance that covers missed rent, or a rent guarantee arrangement in place and they may struggle to afford their mortgage repayments.
This guide explains the steps that you can take to minimise financial loss and help to avoid the hassle of going to court to reclaim unpaid rent:
The first action to take should be to talk to your tenant to get an idea of what their situation is. There may be a simple banking error that has resulted in them not paying the rent on time. They may have switched jobs and have a new pay day, so the issue is only a temporary one. Try to be understanding and empathetic, while making it clear that you are counting on the rent to cover the mortgage payments. Also, consider whether this is a one-off situation or whether there has been a series of missed rent payments when you decide which course of action to take.
If your discussions are positive and the tenant gives you confidence that they will be able to repay the missed rent payment, you can discuss payment terms. If the tenants are usually reliable with rent payments and they are generally good tenants, it is in your best interest to be flexible, and you could offer to spread out the costs of the repayments.
If you have tried to contact your tenant about the missed rent payment and they have not responded, the next option is to send a formal letter. The letter should refer to the date of the missed rent payment and the amount outstanding. Keep a copy of the letter you send so that you have a paper trail.
You should also speak to your landlord insurance provider to check whether you are covered for loss of rent and what the terms are. Some landlord insurance has a deferral period, such as the first month of rent arrears. If you can claim for the missed rent, ask how to make the claim and submit it.
If 14 days have passed since the missed rent payment, contact the tenant again, including the missed payment details. You should also advise that if they do not make the payment, you start to take legal action and seek possession of the property. If your tenant has a guarantor, this is also the time to contact them regarding the missed payment.
Once 21 days have elapsed with no response from your tenant, you should send a final warning letter. You can download online templates to ensure that you cover everything that you need to, while complying with the regulations.
If none of your previous communications have been responded to, you are left with little option but to start eviction proceedings. When tenants stop paying rent, landlords are legally entitled to start the eviction process by issuing a Section 8 notice under the Housing Act 1988. The only way a landlord or tenant can end a fixed term early is if there is a breach of the tenancy agreement contract, which includes rent arrears.
Evicting a tenant will typically be the last resort, as you do not want to face rent arrears court fees and legal costs.
However, when your tenant doesn’t pay their rent, unless there is another financial solution such as them seeking housing benefit, you may have no other option. If the court determines that there are grounds for eviction, the tenant will usually be required to leave the property within 14 days.
It is possible to claim back money owed through the Small Claims Court by using the Money Claims Online portal. This can be done once possession has been regained and the deposit has been dealt with.
Worried about how you will handle missed rent payments? We provide a rent collection service with proactive pursuit of late rent payments to ensure that you comply with the relevant regulations. Contact us today to find out more about our professional lettings service in Putney.
This guide explains the steps that you can take to minimise financial loss and help to avoid the hassle of going to court to reclaim unpaid rent:
1 Talk to them
The first action to take should be to talk to your tenant to get an idea of what their situation is. There may be a simple banking error that has resulted in them not paying the rent on time. They may have switched jobs and have a new pay day, so the issue is only a temporary one. Try to be understanding and empathetic, while making it clear that you are counting on the rent to cover the mortgage payments. Also, consider whether this is a one-off situation or whether there has been a series of missed rent payments when you decide which course of action to take.
2 If they respond - Discuss payment terms
If your discussions are positive and the tenant gives you confidence that they will be able to repay the missed rent payment, you can discuss payment terms. If the tenants are usually reliable with rent payments and they are generally good tenants, it is in your best interest to be flexible, and you could offer to spread out the costs of the repayments.
3 If they don’t respond - Send a formal letter
If you have tried to contact your tenant about the missed rent payment and they have not responded, the next option is to send a formal letter. The letter should refer to the date of the missed rent payment and the amount outstanding. Keep a copy of the letter you send so that you have a paper trail.
4 Contact your landlord insurance provider
You should also speak to your landlord insurance provider to check whether you are covered for loss of rent and what the terms are. Some landlord insurance has a deferral period, such as the first month of rent arrears. If you can claim for the missed rent, ask how to make the claim and submit it.
5 Contact tenant again (and guarantor)
If 14 days have passed since the missed rent payment, contact the tenant again, including the missed payment details. You should also advise that if they do not make the payment, you start to take legal action and seek possession of the property. If your tenant has a guarantor, this is also the time to contact them regarding the missed payment.
6 Send a final warning letter
Once 21 days have elapsed with no response from your tenant, you should send a final warning letter. You can download online templates to ensure that you cover everything that you need to, while complying with the regulations.
7 Consider and begin eviction proceedings
If none of your previous communications have been responded to, you are left with little option but to start eviction proceedings. When tenants stop paying rent, landlords are legally entitled to start the eviction process by issuing a Section 8 notice under the Housing Act 1988. The only way a landlord or tenant can end a fixed term early is if there is a breach of the tenancy agreement contract, which includes rent arrears.
Evicting a tenant will typically be the last resort, as you do not want to face rent arrears court fees and legal costs.
However, when your tenant doesn’t pay their rent, unless there is another financial solution such as them seeking housing benefit, you may have no other option. If the court determines that there are grounds for eviction, the tenant will usually be required to leave the property within 14 days.
It is possible to claim back money owed through the Small Claims Court by using the Money Claims Online portal. This can be done once possession has been regained and the deposit has been dealt with.
And finally
Worried about how you will handle missed rent payments? We provide a rent collection service with proactive pursuit of late rent payments to ensure that you comply with the relevant regulations. Contact us today to find out more about our professional lettings service in Putney.
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