For tips on: (1) Finding the right tenants; (2) The importance of guarantors; (3) Landlord Insurance Policy; and (4) The importance of protecting the tenants deposit, read Part 1 on how to avoid rent arrears.
Part 2 is a continuation to give you the best chance, as a Landlord, of recovering rent arrears should a tenant not pay.
- Communicate with your tenants and keep records
Don’t be afraid to contact the tenant as soon as possible after non-payment of rent. It is best to adopt an open and co-operative approach from the outset to try to understand the reasons for the rent payment not being made.
For example, you may discover that the tenant has fallen ill or lost their job. Are the tenants entitled to claim any benefits that could assist them? Have the tenants sought advice on their entitlement and made a claim?
These are the type of questions and steps that if dealt with early, may reduce losses and stress for both parties. Whilst you should contact the tenants, this should not be interpreted as a licence to contact the tenants several times a week to demand payment of rent. Such conduct may be classed as harassment, so make sure you strike the right balance, and where possible, obtain the reasons of non-payment and when you should expect the late rent payment to be made, in writing.
- Information is king
Once tenants have left the property, it can be difficult to maintain contact with them and their whereabouts. The key to a successful recovery of rent arrears is the information which you hold for your tenants / ex-tenants. It is hugely beneficial to maintain a database of information for each tenant and guarantor, however ensure that you familiarise yourself with the General Data Protection Regulations (“GDPR”). The information should include, but not be limited to:
- full names (including middle names);
- contact numbers;
- home addresses;
- email addresses;
- places of work; and
- whether or not home addresses are owned (the last two are more important for guarantors).
These are all valuable pieces of information and can help the rent recovery process further down the line, particularly if court proceedings are necessary.
Similarly, building up a property file for each tenant/guarantor is helpful. Each time a telephone call or email is received, log it in the property file. This way, you can build up a picture of the tenant/guarantor and may be able to garner further useful pieces of information which may prove important later.
- Electronic tenancy only
When pursuing unpaid rent with short term tenants such as students, a common complaint is that they do not have/did not receive a copy of their tenancy agreement.
It is common for a full, hard copy tenancy agreement not to be sent to a tenant, especially if they are short terms tenants; everything is often done online. In these circumstances, it should be made clear that a hard copy will not be provided and that if the tenant wants to retain a copy of the tenancy for their records, they should print a copy off from their portal/online tenancy area. If this is not available, an email should be sent to the tenant with the attached, signed tenancy agreement for their records.
It is recommended that this point is reiterated throughout the short-term period, for instance, when reminder emails for upcoming rent are sent. It is a simple measure put in place to protect you from a tenant claiming naivety.
As a Landlord, managing a single rental property or portfolio of rental properties can be an exciting and profitable investment but do not take short cuts to save money or time. As experts in the field of litigation, we see how short cuts have come back to bite.
Taking the steps outlined in part 1 (https://www.griffin.law/landlord-how-do-you-avoid-rent-arrears-part-1-a-solicitors-top-tips/) and the above steps, will help prevent and make the recovery of rent arrears easier.
Should you be unfortunate enough to pursue the eviction of your tenants at the same time as recovery of rent arrears, it is important that the situation is handled with care. These situations can often be rectified without the need for court intervention. However, where a dispute escalates, seek legal expertise to ensure you understand all your options and ensure the effective application of the law.