Having one of your tenants not pay rent is an unfortunate challenge that is often faced by many landlords. If not dealt with correctly, it can sometimes put them off renting out their family home or purchasing additional buy-to-let properties to add to their portfolio.
With rental and tenancy law providing strong protection for tenants, it can be a daunting task to take legal action. In this article we go through all the steps you need to take to help you resolve rental non-payment.
Before Tenancy - Take the following steps:
- Take out rent and legal protection (RLP). This needs to be done before the start of the tenancy. Shop around and try to get the best quote. If you take out RLP after the tenancy starts, you will not be able to claim any lost rent
- Make sure you have a record of the tenant's receipt all of the necessary paperwork, including "how to rent" guide, gas certificate, prescribed information, deposit certificate, tenancy agreement and any other certificates that affects the property such as a HMO certificate
During Tenancy - If the Tenant Does Not Pay The Rent, You Can Do the Following:
- It may be that they have forgotten to pay it or the standing order they set up has run its course. You do not want to go in guns blazing and it turns out it was a mistake from the tenant's end, so try talking to them first
- If your tenant still does not pay their rent then you can take legal action but only once the tenant is 2x rent periods in arrears. For example, if rent is due on the 1st of the month and the tenant does not pay it and the tenant also does not pay the rent due on the 1st day of the next month, this would be classed as 2x rent periods in arrears
Section 8 and 21 Notices - Two Actions You Can Take:
If the tenants are on a fixed term contract you can serve a Section 21 or Section 8 Notice - below are the scenarios within which you can serve both:
- A section 8 is when the tenants are in breach of their tenancy and the vacating period can vary from 2 weeks to 2 months. When serving a section 8 you will need to specify that the tenants are in arrears.
- If the tenants are on a statutory periodic contract (rolling contract) or you are in the last two months of a fixed term contract, you can serve a section 21 on the tenant. A section 21 notice gives the tenants 2 months to vacate the property without giving any reason. This will need to be served by the coming rent due date. Going back to the previous example, you will need to serve notice by 1st March and the tenants will need to leave by the 30th . Please be aware that you cannot serve a section 21 notice within the first 6 months of the tenancy. Please be aware that if the tenants decide to pay their rent, the Section 21 notice will be null and void.
- It should be noted that both of these options are very much “gung-ho” in their approach. We suggest you try and speak to the tenant, as they may be going through a difficult time - discuss with them their situation and see if you can help them in any way. Paying 2 or more months’ worth of rent in one go can be daunting, so if you can come to an arrangement with the tenant, they can pay off a bit each week or month, on top of their regular rent. Make sure you get any agreement in writing and have both parties sign it, so that each party knows their obligations. Keep a track on how much they have paid off, as well as on the arrears.
- At this point you can make a claim from your RLP, to ensure that you are not completely out of pocket.
- If you decide to serve notice you will need to draw up the notice. We use Landlord Action (https://www.landlordaction.co.uk) - their service costs £120.00.
Whether you use Landlord Action or another company, they will ask for all the documentation that you gave to the tenant at the start of the tenancy including any extension contracts that may have been signed.
Next Steps for Section 21 or 8 Notices
- Once the notice is drawn up, you will be given a deadline on which to serve the notice. Make sure you have photographic evidence that you have served the notice, this means going to the property and putting it through the letterbox. Do not personally give it to the tenant as he may deny receiving said notice
- Put the date they are to move out in your diary and go round on that date. Hopefully, they would have moved out at this point so you can claim your property back.
- Unfortunately, in some instances, the tenant will not vacate. If you used Landlord Action, they will be able to help you through the next stage. Alternatively, you can instruct solicitors to help you.
Tenants Not Vacating? Gaining a Possession Order and Evicting a Tenant
At this point you will need to gain a possession order, which the solicitors will be able to help you with - this can take up to 8 weeks to obtain.
- If the tenants still do not leave then you will need to instruct a county court bailiff to evict them. This can take up to 8 weeks to instruct, but please speak to your solicitors who will be able to advise you on the best course of action to take.
- Evicting a tenant can take up to 6 - 7 months, so you will have to be patient. Unfortunately, you cannot go into the property before the bailiff evicts the tenant and forcefully evict, so please be patient and let the law take its course. Thankfully, in our experience, involving bailiffs does not happen often.
Hopefully this guide has helped you understand the courses of action you can take if your tenants do not pay their rent on time.
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