So many people are now landlords thanks to the buy-to-let boom. But dealing with non-paying tenants can be a pain. Andrew Wright reports.
Danielle Hughes, from Kirwans law firm, says that although chasing up arrears is not a particularly enjoyable experience, it doesn’t need to be a painful one.
It is one of the biggest challenges facing landlords, but Danielle points out that a dialogue between landlord and tenant is key to solving the problem.
She says: “Many landlords are worried that their tenant will stop payments altogether if they miss one payment and so they make the mistake of aggressively pursuing rental arrears,” says solicitor Danielle Hughes from Kirwans law firm.
“But there are always two sides to the story. There is often a good reason why tenants can’t or won’t pay rent on time, and the sooner you find out what the problem is, the sooner it’s likely to be solved.”
Danielle, who specialises in both civil and commercial disputes in Kirwans dispute resolution team, sets out below her top tips for pursuing missed payments and how best to avoid problems in the future.
Find out what’s gone wrong
Make contact with the tenant as soon as possible following the missed payment. Try to adopt an open and co-operative approach rather than an aggressive, threatening attitude.
There could be a number or reasons why payments are missed, i.e illness or loss of job.
Be careful to strike the right balance, as frequently contacting the tenants to discuss a missed payment could be classed as harassment under the Protection from Harassment Act 1997.
Record everything
Contact, or attempted contact made with the tenant should be properly documented. Whether it’s visits to the property, telephone calls, emails, letters or texts, all forms of contact should be recorded, with copies made of each letter sent.
The Court’s forms require an explanation of what steps the landlord has taken to recover any arrears.
Give notice
The law says tenants are entitled to quiet enjoyment of the property – whether they are paying rent or not. Your tenancy agreement is the first point of call, be sure to check it, as you could be in breach of the agreement if you turn up unannounced.
48 hours is generally accepted as ‘reasonable notice.’
Check your tenant’s financial situation
It may not be the easiest subject to broach, but it is not unreasonable to request details of your tenant’s incomings and outgoings, which is actually standard practice, with income and expenditure forms readily available to help your tenant to gather this information.
Offer solutions
It’s likely that your tenant will be feeling just as concerned about the missed payment as you are, so try to work with them to find solutions. Suggest, for example, that the tenant continues to pay their rent, as well as an additional sum for the rent arrears that can be spread over a number of weeks or months.
Keep track of payments
It is essential that you keep an account of rental payments, providing tenants with quarterly rental statements documenting all payments made and missed, including a running total of any arrears. If payments are made in cash, make it your practice to produce a receipt and both sign it.
Recognise when it’s time to take legal action
If there is still no sign of rent payments being made, it’s at this point that you might want to seek specialist legal advice, as you look at serving notices on the tenant.
The two most common forms of notice are under Section 8 and Section 21 of the Housing Act 1988, and which one you serve will depend on the circumstances surrounding the case.
If the tenant vacates the property without paying the rent arrears, landlords have a period of six years from the date of the missed payment to pursue the tenant via a separate debt recovery action.