Rent arrears brings on a chain of events that affects all parties of a rental property. From a tenant’s perspective, they may feel an overwhelming sense of worry and frustration that they cannot cover some or all their due rent.
But for them, this is not the end of the story, along with rent arrears they’ll usually be struggling for money in other areas, such as school clothes, food, other essentials etc. So, try and be as sympathetic as you can.
Not forgetting you, the landlord. It could be a potentially detrimental time as it may affect the cash flow in your accounts meaning you can’t cover your costs. Your approach to the entire situation will help determine the entire outcome, with how forthcoming your tenants are in sharing with you their difficult situation.
Ideally, you would have completed as much referencing as you could have done to ensure you have responsible tenants, so that you can be assured you’ve taken as many steps as you could so that any arrears wouldn’t stem from irresponsible tenants.
As discussed in our article How to Reference a Tenant, gathering Photo ID, bank statements, payslips or a self-assessment report, current proof of address, right to rent, and referencing from landlords and employees will help negate the majority of irresponsible tenants.
This step isn’t fool proof and won’t guarantee your tenants wont default or fall into arrears, but it’ll help. Keeping a good line of communication will engage them in being more willing to freely speak and let you know of maintenance issues, or upcoming financial difficulties they could be facing.
Dealing with maintenance queries promptly will help gain their trust, and the better you tend to these issues, the more faith they should have in you.
If your tenants are open and transparent with you, any information they divulge with you will help to be a little more prepared for what may be coming.
Ideally a standing order or direct debit will be set up from the tenant on a fixed and regular basis, so that tracking, and tracing payments is made simpler for both parties.
Keep records of payments to refer to in the future, it may prove beneficial to look back at if there are any discrepancies down the line.
As mentioned, this period will be difficult for all parties, especially if the tenant is genuinely facing a difficult time.
If you notice that a tenant hasn’t paid when they should have, contact them by email as its recorded, or if needed via phone call or in person. In most cases it’ll be a simple error, whether human or with the banks.
As a worst-case scenario, be prepared for them to say they cannot meet the agreed amount and take a pragmatic approach as a response. This is where maintaining a good relationship with tenants will kick in, ask for timescales, and think of anything you could potentially do to help.
As a productive approach, set up an amicable repayment plan that is realistic for both your needs, this step will vary in different circumstances dependant on how bad the tenant’s situation is.
As a long term approach your tenant may need to enquire about getting support in the form of the Local Housing Benefit to subsidise the rent payments moving forward. The Citizens Advice Bureau are well informed in this field and can help with further questions relating to getting this benefit.
In the unlikely situation you aren’t happy with any of the above outcomes, as difficult as it may be, it may leave you to investigate the options you have to legally evict your tenant.
Ideally you would have already given the tenant ample opportunity to make payments, and this decision would be made if they fell into arrears with no alternative ways out.