How can a Letting Agent help deal with tenants not paying rent?
At some point over your career as a landlord, it’s sadly almost a certainty that you will experience issues with tenants who do not pay their rent. While this could be for a wide range of reasons, from simply lacking the money to make a payment to withholding their rent due to a dispute, it will be a major inconvenience to you as a landlord regardless of reason.
What can I do if a tenant doesn’t pay rent?
If a tenant can’t or won’t pay their rent, then your first step should not be an attempt to evict them. Eviction is a potentially expensive option, and will be highly time consuming. As a landlord, you have a number of options, including:
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- Talking to the tenant — the failure to pay may be temporary, and it is better to try to maintain a good relationship with the tenant. Ensure you stay professional and calm at all times, as this will stand you in good stead if you have to take further action later.
- Considering reducing the rent — if you have a good relationship with the tenant, you may find that reducing short term rent may benefit you in the long run. If you do so, make sure to state in writing the period at which the reduced rent ends.
- Exploring housing benefits for private tenants — if a tenant is experiencing a crisis, for instance losing a partner or job, then they may be eligible for government allowances. Point them to the local council for advice and assistance for paying rent.
- Letting them leave — if a tenant cannot pay rent, it may be best to let them leave without paying the rent if they will not be able to realistically cover the sum owed. This prevents time being wasted, and prevents long term losses.
You may have noticed already that each of these options may be highly time-consuming, especially if you live a long way from the property in question. However, some tenants may refuse to pay and refuse to leave the property. In these situations, events are likely to become even more expensive.
How can I legally ask a tenant to leave for not paying rent?
You can legally request that a tenant leave your property if they do not pay rent. There are two primary methods through which to achieve this. These are:
- Section 8 notice — if you’re still within the first six months of your contract, you will need to issue a Section 8 notice. This will need to detail the exact grounds on which you are seeking to take back possession of your property. Depending on if the tenant has broken other terms of the contract, you must give between 2 weeks and 2 months notice, and should include an exact date by which they must leave.
- Section 21 notice — if the tenant has passed beyond the fixed term of their contract, you may issue a Section 21 notice. This must give the tenant 2 months notice that they need to leave the premises, at minimum, and must include a specific date of departure.
If a tenant does not leave by the date of departure within a Section 8 or Section 21 notice, then you may apply for a court order to have them evicted. This can be a long and complex process, and there is no guarantee a court will award a judgement in your favour.
How long does it take to evict a tenant for not paying rent?
There are three steps to evicting a tenant from your property. These are:
- If a tenant is refusing to pay rent, then you must first issue either a Section 8 or Section 21 notice to them. This means that they have between 2 weeks and 2+ months notice to leave, depending on whether they have breached other terms of their contract.
- If the tenant fails to leave the property, then you may apply for a standard possession order, assuming you wish to recover any lost rent. You cannot use the online service for this, and must apply to your local court that deals with housing possession. This costs £355 to apply.
- If your tenant still refuses to leave, you may apply for a warrant of possession. If granted, this means bailiffs can remove the tenant from your property.
Can Landlord’s Insurance help protect me if my tenant won’t pay rent?
Depending on the insurance you hold, you may be able to make a claim against your landlord’s insurance if your tenants are not paying rent. This particular form of landlord’s insurance is called rent guarantee insurance. However, there are usually restrictions placed on these claims. An example of a common restriction is that no claim can be made until rent is at least one month overdue. If you have a mortgage payment due on the property, or need to use the rent to cover damages, then this can mean you have to dig into your own funds to make payments while you wait for your insurance payout.
Is it hard to deal with a tenant who is not paying their rent?
As you have probably noticed by this point, dealing with a tenant who will not or cannot pay their rent is a highly time-consuming eventuality. In a best case scenario, at the end of this you will receive the same rent as normal, having put valuable hours of your time into it. In a worst case scenario, you will spend months receiving no rent, organising expensive court appearances, and hoping that a court allows you to have the tenant evicted. In either eventuality, you will have used large amounts of your time and put in a lot of hard work to resolve the situation.
What can a Letting Agent do to help with tenants who won’t pay rent?
By having a Letting Agent, you will be able to avoid having to deal with the day to day management of your property. This includes dealing with repairs, and handling the arrival and departure of tenants. Importantly, this also means your Letting Agent will handle the entire process of dealing with a tenant who has failed to pay their rent.
You won’t have to worry about a thing, will not be forced to pour hours of your time into handling the case, and most definitely won’t be expected to handle the heavy load of getting a tenant evicted. With 1 in 6 landlords having begun the eviction process of a tenant within the past three years, it is clear that there is a genuine risk posed to landlords. If you are worried about tenants failing to pay the rent they owe, and don’t feel you have the time to handle the process, now might be the time to hire a property management company. If you are interested in hiring a property management company, why not contact our experienced and friendly team at Red Brick Management today.
