As a landlord, it can be difficult to know what to do when a tenant pays late every month. The rent always turns up eventually – but you’re never quite sure when you’ll see it. This can be a source of a lot of anxiety and stress.
Tenants may struggle to pay rent on time for a number of reasons. The key is to be as understanding as possible while being mindful of your own finances. It’s important to know when to give them some leeway, and where to draw the line.
If you’re thinking “my tenant is late paying rent – what do I do?” then read on. In this guide, we’ll share our top tips on dealing with late-paying tenants. We’ll also discuss how you can prevent late rent altogether with a guaranteed rent scheme.
1. Understand Your Tenant’s Rights
If your tenant keeps paying rent late, start by re-reading the tenancy agreement. It’s important that you understand your tenants’ rights, as well as your responsibilities as a landlord. In the UK, landlords cannot impose a fee for late payment of rent unless the tenancy agreement says so. So, look over the contract and confirm whether this is the case. Be aware that being in arrears does not affect tenants’ statutory rights. They are still entitled to quiet enjoyment of their home – you can’t enter the property unannounced.2. Reach Out to the Tenant
Reach out to the tenant to remind them that they have not paid their rent. If the tenant always pays rent late, ask them if there is a particular reason they are having trouble. They may be experiencing financial difficulties, so try to be as patient and understanding as possible. Ask if there’s anything you can do, and roughly when you should expect payment. If this is your first attempt at communication, stick to an informal tone. A phone call is fine, but send a follow-up email or text message to keep track of what was said.3. Send a Late Rent Notice
If the rent is still late after 7 days, sending a formal late rent notice may help prompt the tenant to pay. It is also important for your records, as it proves you’ve tried to resolve the situation amicably. You can send an official rent arrears reminder via email or by post. The letter should state:- The date it was written
- The tenant’s name and the address of the property
- Your name and contact details
- The outstanding amount
- The date the rent was originally due
- The date by which you expect payment (optional)
4. Make It Easier to Pay
Often, if you have a tenant consistently late paying rent, simplifying the payment process can help. Aim to make paying rent as quick and easy as possible, so that tenants aren’t tempted to put it off. For example, if you only accept cash or cheque, you could start allowing tenants to pay via bank transfer. This will enable them to set up a direct debit or standing order, meaning they won’t have to remember to pay. Rent will simply leave their account automatically on the same day each month.5. Change the Rent Due Date
Sometimes, tenants can struggle to pay on time due to the date that rent is due each month. For example, if rent is due the week before they get paid, they may not have enough in their account to cover it. This may lead to the tenant paying rent late every month. Ask your tenant whether this is the case for them. If so, changing the rent due date may be extremely helpful. You can set up a payment plan to allow them to pay the difference back in small amounts over time.6. Offer an Incentive for Paying on Time
If you can afford it, it may be useful to offer some sort of financial incentive for paying rent on time. This approach tends to work best for tenants who regularly fail to pay rent on time due to forgetfulness. For example, you could offer your tenant a discount on rent if you receive it before the due date. This does not need to be large. Even a 5% discount will save your tenant £50 each month if their rent is £1,000.7. Serve a Section 8 Notice
If nothing else has worked, your last (and most drastic) option is to serve the tenant a Section 8 notice. This is a document giving the tenant notice to vacate the property due to a breach of contract. Often, the risk of losing their home will prompt even the most reluctant tenant to pay their rent on time. If you do not wish to evict the tenant, you can withdraw the notice to leave once they have repaid their debt.8. Try a Guaranteed Rent Scheme
If you want to avoid the risk of a tenant late paying rent, why not try a guaranteed rent scheme? This is an arrangement whereby a property management company pays you a monthly fee to sublet your home. They’ll handle every aspect of letting, managing and maintaining the property on your behalf. With guaranteed rent, you’ll benefit from a secure, fixed, long-term rental income. You’ll be paid on time, every month – even if the tenant pays late, or stops paying altogether. Your rent is 100% guaranteed, even during void periods. At 53 Degrees Property, we’re proud to offer guaranteed rent for landlords in line with market rates. To find out more about our 3-5 year contracts, contact us today. Fill in our online form or call us on 0330 058 0165.Get a FREE Guaranteed Rent Valution
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