If your tenant has stopped paying their rent it doesn’t have to turn into a nightmare. The first thing to remember is the difference between a tenant who can’t pay their rent as opposed to a tenant who won’t pay their rent.

Here are some suggestions about how to resolve the situation.

It’s good to talk

Talk to your tenant in a professional manner to try and find out whey they haven’t paid, it may be a temporary issue. It may be possible to put a payment plan in place so you know when and how much you are likely to be paid.

Think about a rent reduction

If you want to keep your tenant and avoid the cost of finding someone new then replacing the rent for a short period may be the answer. This should be confirmed in writing along with the date when you expect payment of the full rent to be resumed.

Are housing benefits the answer?

Your tenant may be eligible for Government benefits so direct them to the council for advice on help with the rent.

Still can’t pay

If your tenant can’t pay the rent the best option may be for them to leave your property. Don’t forget to think about unoccupied property insurance if the property is empty for a while.

When your tenant doesn’t respond

If your tenant refuses to pay or respond to your contact attempts you could contact their financial guarantor if listed on their references or if necessary contact a referee for additional contact details. Handle these communications with care to avoid embarrassing your tenant in case they are only experiencing a temporary problem with payments.

Section 21 Notice

Sometimes the best thing to do is cut your losses. A Section 21 Notice applies when the fixed tenancy period has come to an end. It is not fault based, so you don’t need to specify grounds on why you want to reclaim your property. And the tenant does not need to be in any breach of terms. It is the simplest process and many landlords choose to wait the fixed period out rather than progress with a Section 8. Once you’ve issued a Section 21 Notice, which must be in writing, your tenants then have two months to leave your property. It is worth noting, however, that if you go with the Section 21 you forgo any chance of reclaiming unpaid rent that might be due to you.

Section 8 Notice

If you’re still within the fixed term of your contract (normally within the first 6 months) you’ll need to issue your tenant with a Section 8 Notice. With this you will need to detail the exact grounds on which you are seeking possession. Some of these grounds are mandatory – i.e. the court must give possession to the landlord if they are met – others are up to the court’s discretion. The court may also take into account your behaviour throughout the process, which is why it’s so important to have been calm and professional from the start. If the court decides that your application is justified they will grant you a possession order which will allow you to get your property back.

Your tenants won’t leave

Worst case scenario. Hopefully you won’t get to this stage but the next stage is to serve notice that you want seeking possession and enter the legal process to repossess your property. Your options are set out in the Housing Acts of 1988 and 1996.

Deposit Collection Scheme

This may go some way to recouping losses. Deposits are placed in a protection scheme so landlords need to provide proof that the money is owed due to the tenant not paying their rent.

And remember you cannot:

• Enter the property without permission
• Use force to remove your tenant or any of their property
• Change the locks
• Sign up new tenants before the old ones leave

If you would like to review your commercial property or residential landlord insurance cover get in touch with the team at Lockyers or call 01924 278222.