Paying rent on time is probably the most fundamental part of the landlord-tenant relationship. If a tenant pays late then it can lead to some tense moments, particularly if it’s happening regularly. Ultimately, landlords don’t have control over their tenant’s income and outgoings so there is no final solution to rent arrears. However, there are some steps you can take to avoid an arrears situation arising in the first place, and a quick and simple process to deal with it if it does.
Avoiding arrears in the first place
Choose a good tenant – carry out credit checks, screen bank statements, speak to the tenant’s former landlord and ask for a detailed application to be filled out to give you as much information as possible about who the tenant is.
Opt for rent paid in advance – ask for rent to be paid in advance, not in arrears. If there is a problem you’ll know at the start of the month that the rent is due to cover, not at the end of it.
Request a guarantor – if you’re really in two minds about a tenant’s ability to meet the rent then a guarantor provides some security. A guarantor will step in and pay the tenant’s rent arrears under certain circumstances so you are not left short.
Establish a good ‘working’ relationship – view the tenant as a paying customer and work to establish a good relationship with them. Tenants are much less likely to be careless with rent if they are living in a well-maintained property with a landlord who complies with legal obligations and treats them respectfully.
Dealing with arrears when they arise
If you notice that you haven’t received the rent payment when it’s due then it’s important to act fast.
1. Check the tenancy. Does it allow the tenant any time after the rent due date in which to make the payment without this being considered arrears?
2. Contact the tenant. Start by giving them the chance to explain why they have missed the payment and assume it was an accident. Establish a date on which it will be paid.
3. Call the tenant. It’s pretty easy to delete an email but harder to ignore a ringing phone. If you have a tenant who is regularly in arrears then make direct contact as soon as possible so they know that it hasn’t gone unnoticed. The more persistent you are, the less likely they’ll want to have to deal with you again next month.
4. Don’t refuse a payment. If you end up making a claim for possession and a situation arose in which the tenant tried to give you cash or a cheque that you wouldn’t take, the tenant may be able to claim they tried to pay and you refused. So, accept payment in whatever form and create a record of the amount and the date. If the tenant part pays in cash, for example, provide a receipt that you both sign so that the tenant can’t later claim they gave you the whole amount.
5. Don’t let it rumble on. When the rent arrears reach two month’s worth, unless they give you a very good reason not to, move to evict the tenant.