What to do when a tenant falls into rental arrears

What to do when a tenant falls into rental arrears

Being a landlord can be challenging at times, but it can be made much easier when using a property management company. Some property management companies will deal with all rental payments. In this blog, we’re letting you know what to do when a tenant falls into rental arrears.

What are rental arrears?

Rent arrears occur when a tenant does not pay their rent when it is due, it may also be referred to as an ‘unpaid rent payment’. Tenants should be aware of the amount of money they need to pay towards their rent every month. Rent payments should also be outlined in the tenancy agreement. Tenants may also be asked to pay a damage deposit, which is different from a holding deposit.

Thankfully, rental arrears don’t happen too often, which means it’s not something that landlords typically need to worry about. Sometimes, unpaid arrears can lead to broken tenancy agreements and even eviction proceedings.

How to reduce the risks of a tenant falling into rental arrears

As a landlord, it’s completely normal that you’d want to do what you can to avoid your tenant falling into rent arrears. Most of the time when this occurs, a tenant may need to be evicted, which may end up being costly for a landlord too. You should speak to a professional about legal costs when a tenant cannot pay rent for a long time.

Additionally, having to deal with a lack of income due to the rental arrears can be stressful in its own right. Here are some ways to reduce the risks of a tenant falling into rental arrears.

Complete tenant checks

Before you accept a new tenant in your rental property, you should always complete thorough rental checks. This should include checking the tenant’s ability to pay the rent and also requesting a tenant reference. This would usually be completed by a previous landlord or an employer.

Maintain the property well

Tenants are likely to respond much better to you if you maintain the property well. This means responding to queries and addressing issues promptly.

Make payment simple

Most of the time, rental payments will be collected through a monthly direct debit, which means it should be easy for tenants to set up. We offer a wide range of property management services, including financial administration.

With our help, you can ensure that you will be paid in full, on time each month. We will liaise directly with your tenant to make life easier for you. Additionally, we can support you with deposit collection and ensure that it is covered by a suitable Deposit Protection Scheme.

Request a guarantor

A guarantor can be used as a security for a landlord when a tenant cannot pay the monthly rent. This person, the guarantor, will be expected to cover the rental costs in their place. To be named as a guarantor, they must have a good credit score and receive sufficient income to cover the rental payments.

Guarantors are not essential, but they can be useful for landlords when tenants may struggle.

What to do when a tenant falls into rental arrears

Of course, even by taking these steps, you cannot guarantee that your tenants will never fall into rental debt, so here’s what to do if it does happen.

  • Talk to your tenant as soon as possible
  • Provide them with a little extra time if you can
  • Create a payment plan with the tenant – you should provide the repayment plan as a formal letter too
  • Contact the guarantor if there is one who should cover unpaid rent
  • Speak to a legal professional about your options for tenant arrears – at this point, you may need to look into the eviction process
  • You should speak to a rent guarantee insurance provider that may help to protect you when rental income is not paid

No landlord wants to evict a tenant, but if they are frequently not paying rent or they are late paying rent every time, it can be very difficult for a landlord.

We hope this blog has been helpful regarding what to do when a tenant falls into rental arrears. We offer a wide range of landlord services to make the process of renting out a property as simple as possible for you. If you’re looking for a high quality property management company, contact us – we’re more than happy to help.

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