What Do You Do When Your Residential Tenant Has Fallen Into Rent Arrears?
If you have a residential tenant that has fallen behind with their rent, it is important to try to get back on track. Whether you are a private landlord for one property or have a portfolio of properties, a tenant falling behind on their rent can leave you feeling stressed and frustrated and questioning what you should to recover the money owed to you?
In this blog post, we’ll explore your options for resolving such issues.
The importance of timely rent payments
For landlords, receiving regular rent payments is essential for financial planning. It helps cover expenses associated with maintaining the property and ensures steady cash flow. When tenants fail to pay their rent on time or accumulate arrears over time, it can cause wider disruption and problems to your financial position, as a landlord.
The reasons for unpaid rent
Communicating with tenants and understanding whether the reason that lead to the rent arrears is a short term or long term issue can often help landlords to decide how best to proceed in order to mitigate their losses and where possible avoid damaging the relationship with the tenant.
If the reason behind the tenant’s failure to keep up with their rent is a short term issue, the parties could look to try to arrange a payment plan to get the tenant back on track.
If the reason behind the tenant’s failure to keep up with their rent is a long term issue, meaning that the tenant can no longer afford to live at the property the landlord will need to consider how they wish to proceed.
Your legal options for dealing with rent arrears
Assuming that your residential tenant is residing at the property under an Assured Shorthold Tenancy Agreement and arrears have accrued, as a landlord you can:
- Issue a section 8 notice to the tenant, giving two months’ notice of your intention to recover possession of the property on the basis that the tenant is in breach of the tenancy agreement by failing to pay the rent; or
- You can issue a letter before action in accordance with the pre-action protocol for debt claims to demand payment of the unpaid sums. The debtor will then have 30 days to respond to this letter.
At the expiry of a section 8 notice, you can then issue possession proceedings for the recovery of your property, together with any rent arrears.
Alternatively, if you have sent a letter in accordance with option 2, provided the tenant has not responded or requested further information, you can issue County Court proceedings to recover the outstanding sums.
It is likely that if the rent arrears are accruing and the tenant is still at the property whilst making no effort to redress the situation, a section 8 notice may be the better option as this enables landlords to seek both a possession order and monetary judgment.
Often tenants will not leave the property following a section 8 notice if they cannot afford to do so, particularly if they are looking for assistance from local authorities to re-house them. Local authorities will often advise people in such circumstances that if they leave the property, without being evicted, they will be considered to have made themselves voluntarily homeless and therefore ineligible for local authority assistance.
Lovetts Solicitors specialise in debt recovery with over 25 years of industry experience and can assist you with recovering the outstanding sums and/or re-possessing your property. If you are a landlord or managing agent looking for advice or assistance in recovering rent arrears or possession of a property, contact us today.