What to do When a Tenant Fails to Pay Rent

No landlord wants to deal with a tenant who fails to pay rent. Unfortunately, it does happen. But what can you do? Thankfully, there are legal remedies available. However, you must ensure that you stick to the letter of the law – otherwise, you could find yourself in trouble.

How to deal with rent arrears

When a tenant falls behind with rent, we recommend taking the following course of action.

1. Immediately – speak to the tenant

Firstly, speak to the tenant directly. There may be a perfectly plausible explanation as to why the rent has not been paid. Perhaps they forgot, or maybe the mistake is entirely yours. Remain polite and try to resolve the issue between you. If this does not result in immediate payment, follow up with a formal letter.

Top tip – send all letters by way of recorded delivery. That way, you know they have been received. Also, keep a copy for your own records. You may need to present this as evidence later down the line.

2. After 14 days – contact the tenant’s guarantor

After 14 days, send another letter to the tenant. If you cannot get hold of the tenant, or your correspondence heeds no action, check whether the tenant provided a guarantor. If so, contact the guarantor, telling them that rent on the property is outstanding. This may prompt the guarantor to settle the debt.

3. After 21 days – contact the tenant again

If the rent still has not been paid after 21 days, send yet another letter. This time, state your intention to take legal action if the rent is not paid. You should also send this letter to the guarantor, if there is one.

4. After 2 months – take legal action

Once the tenant is two months in arrears, you are entitled to reclaim possession of your property. This involves issuing a Section 8 Notice. To do this, you need to fill in a particular form (usually, the Tenancy 3 form). On this, you must state which terms of the tenancy agreement have been broken, and specify how much time the tenant has to pay the outstanding rent. This should be at least two weeks.

5. After the notice has expired – begin court proceedings

If still no payment is made within the specified timeframe, you can begin legal proceedings. There will be a court hearing, during which a judge will examine the evidence. If you have not followed the right process, or you do not have grounds to take legal action, your case will be dismissed. However, if the court finds in your favour, it may order the tenant to pay the rent arrears, either in part or in full.  It can also order the tenant to vacate the property.

Section 21 Notices

Alternatively, if you are not in a fixed term contract, you could issue a Section 21 Notice instead. This is What to do When a Tenant Fails to Pay Rentwhen you issue your tenant with two months’ notice. The advantage is that you do not have to specify a reason for the eviction, nor do you have to worry about court proceedings.

If you issue a Section 21 Notice, you may still be out of pocket, as your tenant may refuse to settle the debt before moving out. However, sometimes it is better to cut your losses and get rid of a problem tenant. There may also be other ways of recovering your losses. For example, if you have landlord insurance, the policy may cover rent arrears. You can also speak to the tenancy deposit scheme holding your tenant’s deposit. If you can prove that your tenant failed to pay rent, you may be awarded some or all of the deposit.

Get expert legal advice

If your tenant is refusing to pay rent, it is absolutely vital that you remain within the confines of the law. You should not breach your tenant’s rights by entering the property without their permission, forcibly removing them or changing the locks. This may seem strange, seeing as the property is yours. However, if you do not comply with the rules, the tenant could turn the tables and take legal action against you. Also, any legal proceedings to evict the tenant could be compromised.

We therefore recommend seeking early legal advice. At Garner & Hancock Solicitor, we can advise you what to do, ensuring the timely return of your property – and the payment of any outstanding rental payments.

To speak to a solicitor who specialises in landlord law, call us on 020 3870 3676 or fill in the free online enquiry form and we will call you back.