Rent arrears are one of the biggest complaints we hear about from landlords. Just about every landlord I know has a horror story of the tenant who left owing months worth of rent with no prospect of it ever being paid. Even the best and most professional landlord can inadvertently give a tenancy to someone who turns out to be a bad payer. Sometimes people who have been good and conscientious tenants can get into difficulties and end up owing rent.
Here are few things worth thinking about (if you’re not doing them all already).
If you are employing a lettings agent to find a tenant for you, ask them what procedures they have to vet tenants. If you’re choosing the tenant yourself, before letting someone sign up to move into your property you should …….
- Check them out thoroughly. Get references from their previous landlords and (as far as you can) take the trouble to check that the references are genuine
- Ask why the tenant is moving from their last address
- Get a credit check on the potential tenant. It’s quick and cheap and there are various organisations that can (for a small fee) do this for you. We can’t recommend an individual provider, but two minutes on google will give you a list to choose from.
- Consider asking for a guarantor. If you do, you will also need to look carefully at the guarantor themselves.
- Think about taking out insurance for unpaid rent. Obviously this is a cost, though some are very good value, especially as they could potentially save you substantial amounts of cash and stress in the long run. Again, a quick google search will give you numerous providers to choose from.
- If your tenant is likely to claim Housing Benefit, talk to them about opening a Credit Union account (or similar) which can be an effective way of helping manage their rent payments.
If you have an existing tenant who has got into arrears ….
- Act quickly and don’t let the problem mount up.
- Contact your tenant as soon as there is a problem. Do be mindful about how and when you contact them and avoid anything that might come across as intrusive or intimidating. For example, don’t try and ring people late at night or do anything that a bad tenant might try to claim was harassment. Don’t let bad tenants provoke you, always stay calm and business like.
- There might be a problem that you can help the tenant with, but do remember that it’s the tenant’s responsibility to sort it out, not yours!
- Keep notes about any contact you have the tenant and make sure you that all of your paper work about rent payments is fully up to date, (this could be crucial if you ever have to take formal action through the courts).
- If your tenant is (or you think might be) claiming Housing Benefit, report the matter to the council. Sandwell Housing Benefit service has an online form for landlords to do this. If you do use this, please make sure that you read the notes that go with it so you understand exactly what the benefits service can and can’t do.
- Don’t let a tenant blame delays or shortfalls on benefits. Most benefit claims are processed quickly, especially if the tenant gives the council all the information that’s asked for promptly. If there are shortfalls between the amount of benefit that can be paid and the rent that you are charging, it’s the tenant’s responsibility to make sure it gets paid. If the tenant has a benefit problem, they should be talking to the benefits office about it and getting it resolved. Not giving it to you as an excuse.
If things really do break down and you have to evict a tenant, do please make sure that your follow procedure properly. If you’re not sure how to go about it, get the right advice.