What To Do About A Tenant That Is Behind On Their Payments?

Most tenants breathed a sigh of relief when the Renters’ Reform Bill was introduced to Parliament on 17 May 2023, abolishing Section 21 “no fault” evictions. However, the government is protecting both tenants and landlords so, if there are arrears in rent payments, the landlord can still send an eviction notice. As per a notification, “If you’re in rent arrears, your landlord must give you at least 2 weeks’ notice.” Further, if you do not leave, the landlord can take the matter to court, with evidence that you are behind on payments.

If you have an agent, like the Berkhamsted letting agents, they usually handle legal requirements protecting the deposit and rent collections. Rent payments (the amount and dates) are mentioned in the tenancy agreement. Usually, most tenants have a direct debit to their landlord or letting agent. Delays in rent payments can be stressful for both the landlord and tenant. If there is such a problem here are a few tips which may help.

Communication: Talking to the tenant, explaining your position and listening to him/her, will help in understanding the situation from both sides. Politeness and courtesy is a must, as otherwise, if it ends in a court case, the outcome could be affected. A mutually amicable solution with a repayment plan can be arranged.

  • A phone call should be followed with a written communication. If no action has been taken after 2 weeks, a follow-up reminder should be made. If the tenant is struggling financially, Step Change or Shelter may be suggested for advice.
  • If there is an official Guarantor, he/she should be informed, in writing, that the tenant’s rent payments are in arrears and should be paid at the earliest.

Keeping records: Receipts for all payments made should be sent to the tenant, with a copy kept for yourself. A record of all correspondence with the tenant and guarantor should be kept, as evidence.

Insurance or Tenancy Deposit: Most landlord insurance policies will cover rent arrears and missed payments. The insurance provider can provide details of how to claim. If the tenancy ends with payments still outstanding, registering a claim with the tenancy deposit scheme may allow you to claim the amount from the tenant’s deposit.

Reclaim possession: If no payment is made after 3 weeks, a third letter or e-mail should be sent to the tenant and guarantor. You should confirm that you may resort to legal action if payments are further delayed. If a month’s rent has not been paid and another month’s is due, it can be considered as two months in arrears.

Eviction procedure: If no communication or action to repay the arrears has been taken for 2 months, you can start the eviction process by serving a Notice under Section 8, based on rent arrears. If the tenant now pays back the arrears, the Section 8 Notice would be invalidated. An alternative to going to Court would be to ask the tenant to willingly give up the tenancy. This would result in savings by cutting losses and not having to pay Court fees etc.

Court case: If there is no response to your payment requests nor a challenge to the eviction notice, you can take the case to court to seek repossession of the property. If the tenant does challenge the eviction notice, you need proof that every effort was made to keep the tenant informed of the rent arrears. Hence, keeping correspondence copies is essential. You can request the court for a verdict against the tenant to pay the arrears and costs incurred. The court can rule that the tenant:

  • Leaves the property by a specified date,
  • Remains in the property so long as payment is made and conditions obeyed,
  • Makes payment of a specified amount,
  • Leaves the property and pays a set amount to cover the rent arrears, legal costs and court fees.

If the court issues a money judgement, there is a 6 year period for it to be enforced.

Conclusion: Having a tenant who is behind on payments is not an ideal situation, mainly for the landlord but for the tenant as well. The best would be to arrange for a settlement out of court. However, if a repayment deal or other methods to solve the problem do not work out, the above guidelines will help make the process easier for you to handle.

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