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Rent Arrears management

Eviction has high social and economic costs and landlords should, therefore, place increasing emphasis initially on alternative approaches where and whenever possible. Vulnerable tenants (eg, those with mental-health or alcohol and drug misuse problems) may be particularly liable to accumulate arrears if not given appropriate support. The impact of eviction can be major, as once evicted, former tenants are often disqualified from social housing. Landlords may be surprised how many charitable organisations would be willing to work with the landlord and the tenant to deal with any problems with the tenant.

Tenants should not be served with a Notice Seeking Possession until the landlord has established contact with the tenant and spoken to the tenant.

Helpful things to note:

  1. More the rent arrears, less likely the tenant are going to pay the rent arrears.
  2. Where a landlord has failed to take timely action the tenant is likely to ignore paying the rent.
  3. Data shows court action taken to recover rent arrears from a tenant only 11% of tenants paid the rent arrears.
  4. Where a tenant does not have the means to pay; do not pursue a money claim, to do so would be a waste of time and money.
  5. Where a landlord has a Guarantor, data show 68% rent arrears are cleared before the expiry of the section 8 notice.

Pre-Tenacy Steps to prevent rent arrears

  1. Credit check
  2. Affordability check
  3. Previous landlord reference
  4. Employer reference
  5. Guarantor
  6. Timely action from inception date of 1 months rent arrears

Credit check – All landlords must carry out a credit and referencing checks on all tenants. The cost of doing a check is only £7.95 and the cost of not doing one could cost you thousands.

Affordability check – No point letting to someone who is not able to afford to service the rent. Always check the affordability before letting. It is important to check the employment references to ensure the information the tenant has provided is accurate and up to date.

Previous landlord reference – A reference from a previous landlord is a good indicator, but do not rely on this alone.

Employer reference – Check employment references and check the accuracy of the information provided.

Guarantor – If at all possible request a Guarantor as part of the pre-letting condition. By having a guarantor, you substantially reduce the chance of rent arrears.

Steps to prevent rent arrears escalating

Timely action 2 weeks from the rent due date is important. You should send the tenant a letter regarding the rent arrears and follow this with a telephone call, if possible.

When you have one full month rent arrears then technically the 2nd month rent arrears are due, or nearly due. When you do have 2 months rent arrears, then serve a section 8 notice on your tenant.

7 days after serving the section 8 notice contact the tenant to discuss the rent arrears. Also write to the tenant, stating if the rent is not paid you will instigate possession proceedings.

Use the template letters in the “Download Document” which will make things easier for you.

Note; if the tenant has a disability or mental issue’s we strongly recommend that you seek support from the council or Christians Against Poverty “CAP” to work with you to amicably deal with the tenant.