The main worry both existing and new residential landlords have when they decide to let a property is “what happens if the rent doesn’t get paid?” With the UK still slowing recovering from a double dip recession money is tight all around and with some tenants still struggling financially and many finding it increasingly difficult to meet their monthly commitments the possibility of a tenant falling into arrears must be considered very closely. Many tenants experience problems due to changes in personal circumstances, such as redundancy or pay cuts, rather than intentionally refusing to pay rent.
There are of course a number of insurance policies available to landlords such as rent guarantee schemes, which must be taken out prior to the commencement of the tenancy, however if insurance is not in place then there are still a number of options open to landlords before resorting to possession proceedings.
The best advice is to act quickly and try and resolve arrears or late payment with the tenant and try to understand why the rent is not being paid. Discuss the possibility of a realistic repayment plan with the tenant and encourage them to pay what they can each month to keep down their arrears. A little amount often is much better than ignoring the problem and seeing arrears escalate to a point where they can very quickly become unmanageable. If the tenant refuses to pay, or are not in a position to do so, then it is often best all round to serve notice at the earliest possible opportunity and then follow the legal process for eviction in order to recover possession. Once the tenant has then vacated and legal possession obtained the landlord can still look to recover the outstanding debt by using the security deposit and the courts if necessary.
In a nutshell, arrears should not become a problem if landlords deal with them sympathetically and more importantly act swiftly to minimise any losses.
If you are a landlord experiencing issues with tenant arrears then feel free to contact us and we would be happy to provide a free, no obligation review of your situation.