Rental income is the lifeblood of your property investment. If you’re maximising the rent potential of your property, it should be sufficient each month to cover any mortgage payments and regular maintenance, and hopefully give you some profit on top, which many landlords rely on for at least some of their own regular income.
So, checking that your tenant pays the full rent amount on time each month is one of your most important regular tasks.
And if, for whatever reason, they haven’t made payment, you need to contact them right away to find out why. It could be as simple as a bank error or them forgetting to authorise a payment, in which case it should be easy to put right.
However, if there’s a more serious issue, such as them being in financial difficulty or wilfully not paying, you have to take appropriate action. That might be putting a payment plan in place to help them overcome short-term challenges or moving to evict them.
Challenges for DIY landlords
If you’re handling rent collection yourself, there’s always the chance that you might forget to check on the day rent is due, especially if you’re busy or on holiday.
If the tenant is struggling to afford their rent, you need to be understanding and diplomatic, but not let things slip for too long, which can be a fine balance.
And although ‘bad tenants’ are rare, you have to tackle persistent non-payment in a specific way, to ensure you stay on the right side of the law and can move to a legally sound eviction if that becomes necessary.
The benefits of using an agent for rent collection
Professional managing agents like Reeds Rains are doing the job every day and have systems and processes in place to ensure their landlords are paid on time and in full.
If tenants are late making payment, they will be contacted the same day and followed-up. Experienced agents will also be skilled at communicating and negotiating with tenants and should be able to spot any ‘red flags’.
If the tenant has to be evicted, the agent will work with you or an eviction specialist to ensure the process is handled properly and the tenancy is brought to an end, so a new paying tenant can be moved in.
Steps to ensure you receive the rent you’re due
- When the tenant completes their tenancy paperwork, provide your bank details and request that they set up a standing order for the rent.
- Make a diary note to check with your bank the day rent is due.
- If the rent is not received, contact the tenant, ideally speaking to them on the phone and sending a follow-up email to confirm your conversation (or any voicemail).
- If there is just a short-term affordability issue, it’s good practice to give the tenant the chance to make up what they owe over a few months. However, this is a judgement call, so it’s important to ask the right questions so you understand exactly what the problem is and when it will be resolved.
- Put any payment plan in writing, have it signed by the tenant, and then check that the agreed amount is paid on the stated dates.
If the tenant continues to fall into arrears
If the tenant does not respond to you trying to contact them by phone and email, try again within the next 24 hours and have a letter delivered to their address.
If they do not respond for an extended period of time and they are not within a fixed term tenancy, it may be wise to serve a section 21 notice, requiring them to leave the property within two months.
In order to serve a section 8 notice for non-payment of rent, you currently have to wait until they are a full two months in arrears, so a section 21 is often a quicker solution – particularly as if they refuse to leave, you can then move to the accelerated possession order application to remove them, which doesn’t require a court hearing.
It’s important to understand that the tenant has rights for as long as the tenancy continues, regardless of whether they have paid the rent they owe. That means you cannot harass them, enter the property without their permission, or deny them any essential services.
If you are found to be violating their rights, any eviction may be declared invalid, meaning you could be without rent for a considerable period of time, so it’s really worth considering paying experts to handle arrears on your behalf.
If you have any questions about rent collection or you would like to discuss our own service for landlords, which includes debt control and recovery, just contact your local branch.
The Reeds Rains Content Marketing Team
