What happens if my tenant stops paying the rent?

What would you do if your tenant suddenly stopped paying the rent?  This is the number one concern for landlords!  Especially if you have a mortgage to pay and other expenses such as insurance and maybe utilities depending on the terms of the Tenancy Agreement.

Just because your tenant is not paying doesn’t mean that they will let you off.

You need to have a back-up plan in place and act on it quickly.

We always recommend having at least 2 – 3 months rent available to cover things such as rent arrears and maintenance issues.

Step One – The best way of dealing with rent arrears?

• Phone/Write a letter – Pick up the phone and call them to discuss the reason why they haven’t paid or if they are not answering, write a letter to them and if possible, hand deliver it. It might be a simple case of a bank error and they did not know or they might have lost their job, but at least you know the reason.
• Plan of Action – After discussing the situation (and advising them the worst-case scenario – if they do not keep up their rent payments, they will lose their home), you might be able to come up with a plan of action, for example arrange a repayment plan or depending on their circumstances they might be entitled to housing benefit. If solicitors need to be instructed, then it can get very expensive.

Step Two – Your tenant ignores all contact?

• Notice – Once the rent arrears reaches 2 months, you can serve the relevant Section 8 Notice stating the grounds that apply for possession. Serving notice can act as a good wake up call to the tenant and shows that they must take this matter very seriously.
• Housing Benefit – If you know that your tenant is claiming housing benefit, you should contact the benefits department and ask for the payments to be made directly to you.

Step Three – Claim for Order of Possession

• Solicitors – If your tenant has made no attempt to pay any rent then the only option you have is to make a claim for order of possession. Speak to and instruct your solicitors to make a claim for possession to the courts once the notice period has expired.  You will need to pay the court fees and solicitors costs so this can get very expensive not including the loss of rent.

Step Four – Possession

• Visit – On the day the tenants are due to be out, visit the property and check that they have left.  If the property is empty, change all locks.  If, however you still believe the tenants to be residing at the property then contact your solicitor straight away and ask them to arrange for a ‘Warrant of Execution’ with the bailiff’s office.
• Bailiffs – If you have had to go down the route of applying for a ‘Warrant of Execution’ you will be advised of a day and time that the bailiffs are going to be visiting the property to gain possession. Make sure you meet the bailiffs on the day and arrange for a lock-smith to be there to change the locks.

If you have a Rent Guarantee and Legal Protection insurance policy, steps 2 – 4 be done for you and the rent will be paid every month.  You will not have to find extra money to pay legal fees.

Should your question still not be answered, please do not hesitate to contact us.