Picture the scene; your rental due date rolls around and you check your bank account as usual, but what's this? No rent has hit your account. It's one of the biggest Landlord worries, because no matter how carefully you select or vet your tenants, and no matter how well things have been going up to this point, it can happen to anyone. A tenant loses their job, or perhaps a couple split up, with the remaining party unable to pay, and suddenly you have no income, and probably a mortgage payment still coming out.
So, what do you do now? Firstly, don't panic! I have some helpful and simple steps for you:
1. Contact your tenant straight away
This can be a text, email or phone call. The sooner you take action, the more likely it is that you can get the situation resolved quickly and amicably. Yes, I know it's an awkward and unpleasant conversation to have, but burying your head in the sand definitely won't help, and it will be more awkward if you leave it.
2. Try to reach a mutually agreeable solution
There are legal means to evict a non-paying tenant, but these should always be considered a last resort- legal action is costly, time consuming and stressful. Maybe there is something you can do to help, such as let the tenant pay more frequently in smaller amounts, or in the case of LHA you could agree between you to have it paid directly to you instead of the tenant.
3. Put your new agreement in writing
By email or letter. It should set out the agreement clearly with a defined start and end date (if there is an end date), and confirm the consequences if the tenant is unable to stick to the new agreement.
4. Serve Section 21 / Section 8 possession notices - even if you don't plan to use them
You can explain to the tenant that as long as the new agreement is upheld, the notices won't be used, but serving them now will save time later if the tenant does not keep to the agreement. This also serves the dual purpose of showing that you are taking the matter seriously, and know your rights as a landlord.
5. Have a 3 strikes policy
Very rarely, you may come across a professional non-paying tenant. It seems baffling how landlords can end up with months and months of arrears without taking action to reclaim possession, but sometimes the excuses can seem very plausible and there is always 'one more week', which turns into months. Strike one is non-payment without communication, strike two is not upholding their end of the new agreement, if there's a strike three, you need to keep your business head on and take action.
If you are struggling with rent arrears or a difficult tenant, I can help. Give me a call for a free advice chat.