The key with tenant’s arrears is to have a fair, clear and unemotional process to follow to avoid you being accused of Harassment or unlawful eviction, for which heavy penalties can be charged.
The problem with arrears is that they can make you feel very emotional and upset; they are living in your house and not paying you for it. This has lead many landlords to cut off services to the property, harass tenants at work, telling their boss they are in arrears, turning up late at night at their home to ask for money, sending the heavies round or changing the locks. All these could be deemed harassment in a court and therefore should not be part of your arrears chasing process.
There have been many cases of Landlords suffering at the hands of what we call in the industry “professional Rogue tenants”. These tenants make money from uneducated landlords, who take matters into their own hands and do not follow the law with regards chasing arrears and therefore fall foul of the tenant’s rights to quiet enjoyment. By not following the rules, tenants who have access to all the information they need via the internet can use this against a landlord, and if they make a successful claim, can be awarded thousands of pounds in court and end up being branded a Bad Landlord in the media.
There have also been some more horrific cases of landlords being hurt, one landlord was stabbed 83 times by his tenant when visiting to chase up on arrears unpaid, you have to ask the question, is it worth it?
So bearing in mind the Health and safety aspect, the litigation aspect and the moral aspect its worth educating yourself as to how to follow the law to the letter and chase arrears effectively and professionally.
Most tenancies in this country are Assured Short hold Tenancies and therefore I shall deal with these in the main in this article.
Rent is normally due in advance in a tenancy agreement and also it is the tenants responsibility to get the rent to you by the due date, therefore, as soon as a rental payment fails to come in, the rent will officially be 1 months’ rent in arrears and the clock starts ticking. You need to start communicating with your tenant via telephone, email, and letter, whichever way you can to establish what the problem is and get an arrangement to pay. You may well get various excuses as to why the rent has not been paid, but you need to inform the tenant, that although the issue is unfortunate, the rent still needs to be paid. Follow this up with a letter confirming the arrangement to pay and make a note for 7 days later.
In seven days time (this will now be about 14 days in) do the process again, a heavier conversation and heavier letter, if there is a guarantor, contact with them needs to be made now and inform them of the non payment, confirm this again with a letter. The 14 day letter and conversation is along the lines of, the arrangement to pay has not been kept, the rent needs to be paid by return and court action will be taken if necessary to recover the monies due.
7 days later if the money is still not forthcoming, (now 21 days in arrears) go through the process again, Letter, phone call again to guarantor if applicable. You are going to inform them here that the rent of £xx remains unpaid, and despite numerous attempts it has still not been paid, therefore rent must be paid by return and failure to do so will result in court action being taken in 7 days time and that no further correspondence will be made with them.
When the second month’s rent is due, the rent is effectively 2 months in arrears now and therefore you are able to start legal proceeding, of which the first step is to issue a section 8 notice. This is a notice informing the tenant that you are going to start legal action against them in 14 days. You will have to cite the grounds on which you are going to use against them (the grounds of the housing act they have broken) usually 8/10 & 11.
You have to wait for 16 days (allowing 2 for service) and then you can apply to the courts for a possession order and recovery of your arrears due.
Throughout the process, remain calm, professional, try to act as you would expect a bank representative to be with you on an arrears call, non emotional but not budging! A lot of landlords make the mistake of letting tenants off sometimes, or being lenient, and this too can be a recipe for disaster, as they learn that no can sometimes mean yes, and you very often end up in a spiral of lack of performance that just gets worse, so it’s just not worth it, they have signed for the property and must adhere to the terms.
If you would like any more information on arrears, I have written a free downloadable booklet on the subject at www.sallylawson.co.uk
Sally Lawson is a Leading authority on Residential Lettings and Management in th UK, Sally has ran Lettings Branches since 1990, and let over 5000 properties during that time. She has also worked as a consultant and trainer to Letting agents nationwide. Sally is actively involved with ARLA (the association of residential letting agents) as a regional representative and Media Spokesperson for the group, and runs the rapidly expanding nationwide Concentric Lettings operation and Franchised network. www.SallyLawson.co.uk