Landlords: How to deal with rental arrears
The level of rental arrears that tenants owe to their landlords in
buy-to-let homes is becoming higher and higher, according to new
figures released as a part of LSL Property Services' Tenant Arrears
The company said that the number of people who have fallen behind
on their monthly rental obligations had risen by 3.3 per cent in
the last quarter of the year. The volume in severe arrears - those
who owe more than two months - now sits at 98,000 which is the
third-worst figure ever seen in the UK.
As a landlord, though, do you know how best to deal with this?
After all, if rental income is something you rely on to pay
mortgages or to fund your way of life, unpaid rent can be a
Prevention is the best method
It is always best to be able to look at a potential problem and
eliminate it before it becomes serious. The best way to do that in
this instance is to make your tenants aware that you are always
available for them to talk to.
An approachable landlord is always going to be something that
tenants crave, and when it comes to rent, this can be particularly
useful for both parties. If, for instance, a resident sees they are
going to be unable to pay their rent in any given month, they might
be able to warn you as a landlord if they know they can come to you
with a problem.
While this is not ideal for anyone, it will allow you to put other
measures in place to pay any essentials while your tenants get
enough together to pay late. It is always better to know in advance
if your rent will not be coming in for this reason.
Try to sort out a deal
There are sometimes occasions where people will genuinely struggle
in a certain month of the year - perhaps their car has just gone
through a costly MOT for example. So you can look to help them out.
After all, getting paid late is better than never being paid.
If a tenant has not paid in one particular month, you could arrange
for them to catch up by paying what they owe across the next few
months (on top of their normal rent) in instalments. This will mean
they don't fall further behind, and it lets them eat into their
deficit month after month.
Don't be afraid to take legal action
No one wants to have to go to court to get money out of their
tenants, but sometimes it can be the only option, and it is better
to do so sooner rather than later.
Whether you are trying to get back the money you are owed or evict
a difficult tenant who refuses to pay, going to court can be the
shake up that someone needs to get back on track. While it is a
last resort in many cases, it should not be something that
landlords are afraid to do if they need to.