January is a difficult month for many of us. We’ve all enjoyed the excesses of Christmas. But then comes the harsh reality of the new year. When all that extra spending comes back to haunt us. Especially when we’re trying to meet the credit card payments or to last the whole month until pay day. Up and down the country people are in the same boat. Unfortunately, that sometimes means they’re unable to meet all their financial commitments. Which is why January is notorious for tenants failing to pay their rent.
Of course, that’s a sweeping generalisation. The vast majority of tenants are able to budget and make their rent payment as usual. But some will struggle. And, even though Citizens Advice categorise rent as a priority debt some tenants will choose to pay other bills ahead of the rent. Others may simply not have any spare cash to be able to make a choice. They won’t be able to pay any of their regular expenses.
But as a private landlord how do you deal with this? You’re not responsible for your tenant’s lack of budgeting skills. And not receiving the rent payment on time can have serious repercussions for you. You plainly need to get something sorted out. So, what are your options?
Be proactive. As soon as you discover the missing payment contact your tenant. Explain the importance of keeping up to date with rent payments and that they risk eviction by not paying on time. This can be a wake-up call to many tenants who don’t seem to think rent is as important as credit card debt.
Demand your tenant pay the arrears immediately. If they claim this is impossible consider an arrangement. Ask them what they can afford to pay now. Then agree a timetable for them to repay the balance. This approach can work well if your tenant has previously been a good payer.
The important thing is to get a part payment at least. You have a mortgage to pay and other business expenses to meet. Cash flow is vital. And some payment is better than none at all.
If the tenant hasn’t responded to your calls after several days send them a letter. The letter should formally state they’re in arrears and must make an immediate payment. Make sure you keep copies of all letters and retain proof of posting.
Send another letter after 14 days and a further one after 21 days. Make it plain you’re considering recovery action.
The time to begin recovery action during a fixed period of tenancy is when the tenant is eight weeks/two months in arrears. By all means make a final plea for payment but ensure the tenant knows this is a final warning.
You could choose to try and recover the debt while the tenant remains in the property. But it’s highly likely you’ll prefer to evict. Serving a Section 8 order gives your tenant 14 days to pay. But you must also give them a date to leave by. You can apply for a possession order if the tenant hasn’t left the property by that date.
Depending on the circumstances and timings you may prefer to serve a Section 21 notice. This is a no fault notice and therfore does not require evidence but only applies to specific circumstances.
But hopefully you won’t have to go down the eviction route. The missing January payment may be a one off. A temporary hitch after overspending at Christmas. It happens. That doesn’t mean it’s acceptable of course.
But you can resolve the situation. Without having to resort to eviction. Just as long as the tenant quickly makes up the payment and doesn’t default again. Though you may want to advise your tenant to budget more carefully next Christmas.
Private landlords can find tenants fast by listing their property with MakeUrMove the online letting platform bringing landlords and tenants together.