Top 6 tips for pre-empting and dealing with rent arrears
With the number of tenants in severe rent arrears at its highest level in five years, it is essential all landlords do everything possible to avoid this financially fraught situation and protect their income to their best ability.
As leading specialists in providing legal advice for landlords, the experts at GW LET have come up with these top 6 tips to help landlords dodge rent arrears in the first instance as well as offering advice to those with tenants currently in arrears.
1. Make the right choice
While there are no guarantees, the first step in avoiding rent arrears is by finding a good, trustworthy tenant. Landlords should fully vet their tenants and request at least one reference from a previous landlord. If you cut corners in the selection process then you only really have yourself to blame if you end up with unreliable tenants.
2. The guarantor safety net
We understand not all tenants are able to provide references, especially if this is their first time living away from home. In these instances, we would advise landlords to secure a guarantor agreement. Remember to keep these details up-to-date and send copies of any correspondence regarding late rent to them. It’s amazing how a firm word from mum or dad can pay wonders!
3. Keep in touch
It is always a good idea to keep in regular contact with your tenant and develop a professional relationship with them. Should the tenant then enter into arrears you are in a much stronger position to negotiate payment than if you hadn’t spoken to them since handing them the keys!
4. Don’t delay
As soon as a payment is late, get in touch with your tenant ASAP. Inaction could suggest to the tenant that they can be a little lax in their payments. Nipping the potential problem in the bud is essential in preventing its escalation.
5. Get some guarantees
We recommend landlords consider taking out a rent guarantee insurance policy. This type of policy could pay you the outstanding rent arrears in the event of a default by the tenant.
6. Bring in the big guns
In order to evict a tenant in rent arrears before their tenancy ends, landlords must serve a Section 8 Notice. If the tenant continues to reside in the property the landlord will then need to obtain an order for possession from the court. It is critical notices are drafted and issued correctly; last year 70 per cent of notices were thrown out of court because they were wrong. Such an event will cause delays and see the landlord incur additional costs.
GW LET can offer landlords specialist help and advice on rent arrears and help evict a troublesome tenant. If you currently have a tenant in rent arrears, contact our dedicated team immediately and reduce this costly situation.
Content correct at time of publication