Renting out a property, whether it’s a purpose-built flat or an inherited house, is a great way to earn extra income. Unfortunately, being a landlord isn’t always as easy as it might seem.
One of the trickiest situations to deal with as a landlord is when you have a tenant not paying rent. It’s easy to understand how a late rent payment can happen – but, after all, it’s your money. Frequent unpaid rent can lead to financial struggles of your own, such as not being able to afford your mortgage.
So, how do you approach the situation, and what action can you take? In this step-by-step guide, we’ll discuss how to deal with tenant in rent arrears fairly and legally in the UK.
The first thing to do is establish why your tenant’s not paying rent. It could be that they do not realise they have missed a payment. So, get in touch to remind them that rent is overdue.
Ideally, send your tenant a text or an email as evidence that you’ve been trying to contact them. Whatever you do, don’t just turn up at their door. It may be your second home, but an unannounced visit may breach their right to ‘quiet enjoyment’ of the property.
There may be a good reason for the unpaid rent. For example, the tenant may be dealing with unexpected unemployment. Depending on the circumstances, you may choose to give them more time.
Unless you have a guaranteed rent agreement, all landlords must occasionally deal with unreliable tenants. If your tenant is refusing to pay, you may have no choice but to give them notice to leave.
As they have broken the terms of the contract, you can give a tenant in arrears notice to leave at any time. To do this, you will need to serve them a section 8 notice. This must specify the grounds (reason) for possession along with the last date of the notice period.
You can list ‘serious rent arrears’ as grounds for possession when the tenant owes at least:
1. Talk to the Tenant
The first thing to do is establish why your tenant’s not paying rent. It could be that they do not realise they have missed a payment. So, get in touch to remind them that rent is overdue.
Ideally, send your tenant a text or an email as evidence that you’ve been trying to contact them. Whatever you do, don’t just turn up at their door. It may be your second home, but an unannounced visit may breach their right to ‘quiet enjoyment’ of the property.
There may be a good reason for the unpaid rent. For example, the tenant may be dealing with unexpected unemployment. Depending on the circumstances, you may choose to give them more time.
2. Set Up a Payment Plan
If your tenant can’t pay rent, it may be helpful to arrange a payment plan. For example, you could:- Temporarily reduce their rent until their financial issues are resolved
- Arrange for them to pay you in small, frequent instalments rather than one lump sum
- Add a small amount to future rent payments until the debt is cleared
- Suggest setting up a direct debit, so that their rent is paid automatically in future
3. Request Managed Payments
It can be frustrating to have a tenant in arrears if you know they’re receiving government support. You may find yourself asking “why is my tenant claiming housing benefit but not paying rent?” If your tenant receives Universal Credit, you can apply for direct rent payments. This is also called Managed Payment to Landlord (MPTL). It means that the housing portion of their Universal Credit payment will be paid directly to you. Setting up a MPTL could be helpful for your tenant if they struggle to manage their finances. However, be aware that the amount you receive may vary each month, and it may not cover the rent completely.4. Contact the Tenant’s Guarantor
If payment plans and managed payments don’t help, the next step is to contact their guarantor. A guarantor is an individual who agrees to pay any debt accrued if the tenant doesn’t pay rent. If your tenant has a guarantor, you’ll find their details in the Guarantee Agreement they signed before the lease began. This contract will also explain what their responsibilities are in terms of missed rent payments. Unless stated otherwise, you can usually demand payment from the guarantor from one day after rent was due.5. Give the Tenant Notice to Leave
Unless you have a guaranteed rent agreement, all landlords must occasionally deal with unreliable tenants. If your tenant is refusing to pay, you may have no choice but to give them notice to leave.
As they have broken the terms of the contract, you can give a tenant in arrears notice to leave at any time. To do this, you will need to serve them a section 8 notice. This must specify the grounds (reason) for possession along with the last date of the notice period.
You can list ‘serious rent arrears’ as grounds for possession when the tenant owes at least:
- Eight weeks’ rent if paying weekly or fortnightly
- Two months’ rent if paying monthly
- Three months’ rent if paying quarterly or annually
6. Start Eviction Proceedings
One of the most difficult parts of being a landlord is going through the process of evicting tenants in arrears. But if you have a tenant not paying rent and won’t leave (UK), there may be no other option. If they have not left by the date on the section 8 notice, you can apply to court for a standard possession order. Provided the paperwork is correct, the judge will instruct the tenant to leave by a certain date. They may also make a money order covering your legal costs as well as the unpaid rent. If the property remains occupied past the specified date, you’ll have to apply for a warrant for possession. This means that a bailiff will be able to legally evict the tenant.How to Guarantee Rent from a Tenant
To avoid problems with tenants not paying rent in future, why not contact a guaranteed rent company such as 53 Degrees Property? We’ll handle every aspect of letting, managing and maintaining your home so that you don’t have to. Our guaranteed rent service provides landlords with a secure, fixed income every month for up to 5 years. This means you won’t have to worry about finding reliable tenants, chasing missed payments or dealing with evictions. Your rent is 100% guaranteed – even when the property is empty, or when the tenants don’t pay. If you’re looking for a hassle-free way to earn rental income, contact 53 Degrees Property today. Simply fill in our enquiry form or call us on 0330 058 0165 to find out how we can help.Get a FREE Guaranteed Rent Valution
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