Keep a record of payments
Keep a record of when rent payments are due and when they are paid by your tenants.
Send receipts to your tenants each month when their rent payment comes in, detailing the date the rent was paid, the time period it refers to, the amount paid and the amount outstanding.
This system is particularly useful if you have more than one tenant in the property who pay separately, as it will enable your tenants to quickly see who hasn’t paid.
Remind tenants on a joint tenancy agreement that they are all equally responsible for paying the rent and for clearing any debt owed as a single unit.
If you do decide to make an application for possession against a tenant (or tenants) based on them not paying rent, you will be required to provide a copy of all rent payment transactions.
Write to the tenant
If rent hasn’t been paid after several days start by calling your tenant to ask them what’s going on. If calls don’t get through or fall on deaf ears, send your tenant a formal written demand by first-class or hand-delivered mail.
Your letter should request that the outstanding arrears be paid immediately and ask the tenant to ensure that all future rental payments are made in full and on or by the due date.
You should explain that unpaid arrears could result in court action being taken against the tenant and state that you may make an application to the court for possession of the property should more than two months’ rent go unpaid.
Send a letter to the guarantor
If you still haven’t received outstanding rent 14 days after it is due, send another letter telling the tenant explaining that if they don’t pay, you’ll take the matter further and seek possession of your property.
If your tenant has provided a guarantor, send the guarantor a letter advising them that the tenant hasn’t paid the rent according to the tenancy agreement. Normally the arrears will be paid soon after this letter.
Claim possession of your property
If after 21 days you still haven’t received any rent from your tenant, you should send the third letter. This should be the final step before considering further action to reclaim your property.
Use this letter to confirm your intention to take legal action if the rent isn’t paid.
If you have previously sent a letter to a guarantor, you should now send another letter to inform the guarantor that you still haven’t received any rent.
If your tenant has gone a month without paying rent, and another month is now due, you can consider your tenant to be two months in arrears.
At this point, you have the right, under the Housing Act 1988, to take action to claim possession of your property.
Serve a Section 8 notice
Serving a Section 8 notice informs your tenant that you intend to take them to court if they don’t pay within a further 14 days.
This must be done in the prescribed form of a Section 8 notice in order to be valid, so make sure you follow the eviction process closely.
To give your tenants notice using a Section 8, you must:
• fill in a ‘Notice seeking possession of a property let on an assured tenancy.’
• specify on the notice which terms of the tenancy they’ve broken
• give the tenants between 2 weeks’ and 2 months’ notice to move out, depending on which terms they’ve broken
Apply to the court for a possession order if your tenants do not leave by the specified date.
An accelerated possession order application is also possible if you are not claiming back any unpaid rent.
Go to court
If your tenant doesn’t respond to your demands for rent, you are entitled to take legal action to seek possession of your property.
You may also ask the court to make a judgement against your tenant for the arrears of rent and reasonable costs incurred.
The judge will dismiss your case if there is no reason for the tenant to be evicted or if you haven’t followed the right process.
Rent arrears court actions
The court can order the tenant to do one of the following:
• Leave the property before a specified date stated in the order
• Allow the tenants to stay as long as they pay or obey the conditions of the order
• Pay you a specified amount
• Leave the property and pay a specified amount to cover rent arrears, court fees and legal costs
Possession orders with a money judgment: A judge can add a money judgement to cover rent arrears, court fees and legal costs.
If you do get a money judgement against the tenant, you will have six years in which to enforce it.
Some insurance companies supply cover to landlords that will protect you if your tenant doesn’t pay the rent.
For a monthly premium, you can ensure that unpaid rent and costs of evicting a problem tenant are taken care of by your insurance company.