Rent Arrears: What are Your Rights if a Tenant Refuses to Pay?

A tenant that refuses to pay is a landlord’s worst nightmare. Here is our guide to claiming the money you are owed and evicting the tenant if necessary. The number one worry for landlords is tenants who build up rent arrears they either can’t afford, or simply refuse to pay. It can be incredibly frustrating if you’re owed rent from a tenant, after all, you still have the mortgage and other expenses to pay, and without the income you have budgeted for, you could start to struggle to make your own repayments.

Unfortunately, it is relatively common for a tenant to be unable to pay their rent, and often through no fault of their own. Common reasons include:

– The tenant loses their job
– They take a cut in their wages
– A relationship ends and a single tenant is unable to afford the payments
– Some tenants are simply unwilling to pay

**Keep a record of payments**

The first step even before you have any problems with the tenant is to keep a record of
payments. If there are multiple tenants in a property, this can help you easily identify who
has and hasn’t paid. If it’s a joint tenancy, make it clear at the start of the tenancy that
both tenants will be held equally responsible for the arrears and must clear the debts as a
single unit. An accurate record of payments will also be required if you decide to make an
application for possession against the tenant.

**Be proactive**

Tenants who cannot afford to pay their rent will usually be struggling with other payments
too. When there’s not enough money to go around, people will usually pay the creditors
that make the most noise. This does not mean banging on the door and demanding your
money, it simply means contacting the tenant a couple of days after the rent becomes
due.

It might be the case that the tenant has simply forgotten to pay the rent, so it’s always
best to contact them informally first. However, if an email or phone call goes answered,
the best way to proceed is to contact the tenant in writing. You should always keep a copy
of the letter to be used as documentary evidence if the matter ends up in court. In the
letter, make the tenant aware of the outstanding arrears and include a formal demand for
payment.

You should request that the outstanding arrears are paid immediately, ask the tenant to
ensure all future rental payments are made on time, and add that more than two months
of rental arrears will result in you making an application to the court for possession of the
property.

**Contact the guarantor**

If you fail to receive a response to your letter, the next step is to contact the guarantor if
one has been provided. Simply contacting the guarantor to inform them of the arrears will
usually be enough to settle the matter, but unfortunately this is not always the case.

**Repossessing your property**

If you have not received any response to the letters you sent to the tenant or the
guarantor, the next step is to contact the tenant and guarantor again, in writing, to tell
them you still haven’t received any rent and restate your intention to take legal action if
the rent is not paid.

Once a whole month has passed without the rent being paid and the next month’s rent
falls due, the tenant is technically two months in arrears. As this point, under the terms of
the Housing Act 1988, you can now take steps to reclaim possession of your property.

**Seeking possession under a Section 8**

Serving a Section 8 notice informs the tenant that you intend to take them to court if they
do not make payment within the next 14 days. The notice must be made on a special form
entitled ‘Notice seeking possession of a property let on an Assured Tenancy or an Assured
Agricultural Occupancy’. You can download a template of the form by clicking on ‘Form 3’.
If the tenant does not pay the arrears of refuses to leave the property, you will then need
to apply to the courts for a ‘possession order’.

**Making a possession claim**

To speed up the process, you can use the online possession claim service to regain
possession of your property and make a claim for the rental arrears due. The service
provides access to all the court forms you need to make, issue, view and progress a
possession claim electronically.

If the tenant refuses to leave by the date given in the court order, the next step is to apply
to the courts for a warrant of possession. The court will then be responsible for arranging
a bailiff to evict the tenant.

**How can we help?**

Of course, the best way to avoid the time, effort and stress of legally removing a tenant
from your property is to choose the right tenant in the first place – that’s where we come
in. We run extensive credit and references checks on prospective tenants until we are
satisfied they are committing to an arrangement they can afford. For more information,
please get in touch with Martin & Co. Camberley, today.

t: 01276 691510
e: giles.mugford@martinco.com
w: www.martinco.com/lettingsagents/camberley