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What to Do if Your Tenant Has Not Paid Rent
As can be expected, missing rental payments is perhaps the greatest concern of UK landlords, with a dwindling rental income leaving them exposed to mortgage payments, repair costs and management fees. Dealing with arrears can be distressing but here we help landlords understand what they can do if their tenant has not paid rent.
Contact Your Tenant
Reaching out to the occupants of the rental property and seeing why the expected amount has not been paid should be the first port of call for all landlords that find themselves missing a rental payment. Although it may be easier to reach out to tenants through a phone call or visit, having this correspondence in written form will be of use should the situation escalate and the landlord need to pursue the matter in court. It is important for owners to keep in mind that whilst they are pursuing an unpaid debt, they should be respectful of the tenant’s situation as there is more than likely a reason as to why they have been unable to pay their rent.
If this is the case, as it has been over the last 18 or so months as the private rental industry comes to grips with the pandemic, landlords commonly offer their occupants a payment holiday, or temporarily reduced rent. Both of these initiatives work to preserve any rental income the tenants may be able to provide their landlord, alongside being able to keep a roof over their head.
Does the Tenant Have a Guarantor?
Although this is more commonly seen from landlords that let out their property to full time students, or those that did not manage to successfully pass all of the affordability checks in the referencing process, owners have been known to request their occupants obtain a guarantor before moving into the property.
The guarantor is typically someone close to the occupant and acts as a third part to the tenancy that would be liable for any costs that the tenant has failed to provide the landlord. These costs usually take the form of repair work if damage has occurred to the rental over the course of the tenancy and rent arrears. Because of this financial obligation guarantors are subject to the same scrutiny as the tenants themselves as the owner must be sure that they will be able to cover any costs that the tenant should have previously met.
If the owner of the rental property requested that the occupants obtain a guarantor before moving in, if the rent has been left unpaid and the tenant has been reminded of their responsibility to make these periodic payments, the landlord would be justified in approaching the guarantor to recover the unpaid amounts. Further to this in the unlikely event that the guarantor does not clear the outstanding debt then the landlord is able to get a court order to compel the guarantor to make the payment.
Eviction for Rent Arrears
It goes without saying that pursuing repossession of the rental property through eviction is the last resort for landlords. With this being said, withholding rent or accumulating significant rental arrears not only significantly impacts the landlord’s rental income, but is a serious breach of the tenancy agreement.
If rent has been left unpaid landlord are empowered to serve their tenants with a section 8 notice. This notice will allow provides the tenants with 14 days in which to rectify the arrears before court proceedings begin.
Providing the case is ruled in favour of the owner, the occupants of the property could be ordered by the court to pay the due amounts, cover the landlord’s legal fees alongside the rent arrears, and vacate the property by a specified date.
Do I Need Rent Guarantee Insurance?
Wanting to protect your rental income is a universal goal amongst all UK landlords. If the pandemic has proven anything it is that eve after passing all referencing checks, even ideal tenants can encounter an uncertain financial situation, inevitably impacting their ability to keep up ith rental payments. To this end many owners maintain that rent guarantee, or tenant default insurance are essential policies for any landlord. These insurance policies will provide the landlord with the owed amount of rent up to an established sum, or for an agreed upon period; proving to be an essential financial safeguard for owner’s rental income.
However, it is also worth noting that in the overwhelming majority of instances the tenant will have needed to pass all of their referencing checks before the landlord’s insurance will be valid. If the tenant falls into arrears and did not sufficiently pass their affordability checks, the landlord will not have these amounts covered by their policy.
Can Tenants Withhold Rent?
It goes without saying that upon the signing of the tenancy agreement, the tenants will undertake a legal obligation to periodically pay an agreed upon rate each month. However, there is a circumstance under which the occupants of rental property are to offset the amount of ret they pay to the owner of the rental property. Providing that the owner of the rental opportunity is proving to be reluctant is carrying out any repair work highlighted by the tenants, they would be able to deduct the cost of the associated repairs from their future rental payments. With this being said it is essential that any tenants that wish to independently fund the repairs through their rent must follow a strict procedure; notifying the landlord of their intent and offering multiple chnces for the owner to arrange for the repairs to be carried out.
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