What to do when your tenants won't pay rent

As a landlord, you rely on regular rent payment. But from money difficulties to disputes over the property, changing circumstances can sometimes cause tenants to stop paying. For landlords with Guaranteed Rent schemes, the company managing the tenant should continue to pay you monthly as part of your agreement – but for the many landlords who manage their lets themselves, any non-payment of rent can be incredibly stressful. So what should you do if rent gets missed?

Talk to your tenants

In many cases, a missed rent payment could be a simple mistake or even just a lapse of memory. A gentle and polite reminder to establish why your tenant hasn’t paid may be all it takes to get you both back on track.

With the current cost of living crisis and high inflation rates, it’s possible a missed payment could indicate your tenant is struggling to pay. In this instance, look to set up a payment plan with them to spread the cost in the short term and encourage them to look for ways to help make up the shortfall in future, such as Universal Credit.

Keep all communication as friendly and polite as possible – just always keep a record of everything said.

Send them a formal letter

If you haven’t been able to reach, or come to a solution with, your tenants and they’re at least one month behind on rent, you should write them a formal letter. This should state in clear terms that they are in arrears and list the amount owed. You can ask for immediate payment or set short terms on the understanding this will avoid any further action being taken.

If your tenant has a guarantor, write to them as well to let them know the situation. They may pay instead.

Write again to state your intentions

If you still haven’t had your rent paid by the terms set out in the first letter, you should write again to inform your tenant that you will be forced to take legal action to repossess your property, unless they pay within a specified time. This should also be sent to any guarantors.

The Housing Act 1988 allows you to start the eviction process once your tenant is two months in arrears, so if you have not found a solution before this time, you can take action to get your property back.

Begin legal action to repossess your property

If it gets to two months of rent in arrears and there has been no effort made on behalf of your tenants to rectify the situation, you can begin eviction proceedings.

If you get to this stage, it’s crucial to follow the correct procedures to avoid any potential issues arising at a later point in the legal process. Firstly, you need to serve a Section 8 eviction notice, letting your tenant know they have 14 days to pay their outstanding rent or you’ll take them to court.

You should also make it clear which terms of the tenancy agreement they have broken – failing to pay rent in full and on time – and set a notice period for them to leave your let. This should be two months, as a rule.

From this point on, you will be following due legal process to get your property back – but this can last a long time and you still won’t be receiving rent. So what steps can you take to protect yourself?

Steps to prepare and protect yourself

No landlord wants the stress of forcing an eviction, but sometimes you’re left with no choice. It always pays to take these few simple steps to protect yourself in case the situation arises.

1. 1. Always have a tenancy agreement in place

      When you let out your property, you should always have a written tenancy agreement in place signed by all parties, and a deposit held in escrow. This will give you the legal standing to be able to follow the eviction process more easily – and you may even be able to reclaim some of the missed rent from the deposit.

      If you have tenants under a joint tenancy agreement who pay separately, make sure they understand that they are all equally responsible for paying the rent.

1. 1. Keep a record of everything you do

      Throughout the tenancy, keep an up-to-date record of when rent is due and when it is paid. You should also send a receipt to your tenant each month, which shows date paid, the time period it covers and if there’s any left to pay. If you do need to seek possession of your property due to non-payment of rent, you will need to provide a copy of these records.

1. Get Rent Guarantee insurance

   Rent Guarantee insurance is a type of landlord cover that protects your monthly rental income in the event your tenants don’t pay up. It means you will still get the money you need even if your tenants are not paying, so your own financial position is protected while you take steps to resolve the situation.

At Protect My Let, we’ve been helping landlords get the right cover for over 15 years. Our Rent Guarantee cover includes rent indemnity for up to 11 months, repossession, evictions and legal costs up to £50,000 – giving you the peace of mind that if your tenant stops paying rent, you won’t end up paying the price.

Get in touch for a quick and easy quote. Our friendly, helpful team are always happy to help.