Having tenants in rent arrears is probably most landlords’ worst nightmare, particularly at a time when housing costs are rising and landlords face heavy tax burdens.
Not only do landlords have a host of new tax changes to face, it can be costly to evict your tenants if they refuse to pay, not to mention a reduction in your rental income.
If you do find that your tenants are in rent arrears, here are the top three things to do:
- Contact them immediately
You should always stay on top of your own finances, so as soon as you notice that your tenants haven’t paid, send them an email or give them a call to let them know the money is not in your account.
You should do this every time they fail to pay, so that they know you will chase them up and they can’t get away with not paying their rent.
Consistent contact also allows you to come up with some sort of payment plan if they are honest with you about their financial difficulties. Communication between landlord and tenant is always important, but is particularly crucial in this situation.
- Make it easy for them to pay
The majority of tenants pay their rent by standing order, so make sure that they know how to set this up and keep your rent coming through on the agreed date.
If your tenants do happen to fall into rent arrears, you may be able to come up with another way for them to pay, which may be easier for them and helps you get your payment. For example, you could use a mobile card reader so that they can pay you there and then.
It is also important to note that you should never refuse to accept payment when it is offered; don’t insist that they pay by a specific method, as the tenant may use this as a defence in court.
- Stick by the rules
Your tenants are bound to have more respect for you if you show respect towards them and stick to the rules of the private rental sector. It is vital to stay up to date with landlord law and responsibilities. LandlordNews.co.uk has all the latest updates and advice in the sector.
However, being a good landlord doesn’t mean you’ll always get good tenants. Although it is best practice to thoroughly reference all prospective tenants, for the ultimate peace of mind, you should consider Rent Guarantee Insurance. This cover will ensure you still get paid, even if the tenant falls into rent arrears. Our policy will also cover your legal expenses if you are forced to take your tenants to court. While we all hope our tenants will never default on the rent, it is always worth protecting your lettings business.