A tenant not paying rent is set to be a landlord’s biggest challenge in 2017, according to new research from an online letting agent. It is estimated that around 62 percent of landlords in the UK are currently dealing with a tenant not paying rent, and this is predicted to rise significantly.
What factors lead to a tenant not paying rent?
Rents are predicted to rise significantly over the next five years. With tenants in some more affluent areas already paying up to two thirds of their salary on rent, there is little room for rent increases.
Landlords have had to content with several new measures in recent times. A 3% stamp duty increase and changes to tax relief have both had an impact on landlords’ profit. Almost 10% of UK tenants fell behind with their rent payments in August 2016. Having to increase rents to cover costs will only exacerbate the problem.
A tenant not paying rent – what’s the solution?
Between July and September 2016 more than 34,000 landlords were forced to issue repossession claims.
If you’re having problems with a tenant not paying rent ensure you keep records of what is due and when. It’s also important to keep records of any communication that takes places. Make sure you keep notes of any conversations and copies of any emails or letters.
Your first step should be to write to your tenant asking for it to be paid immediately.
If your letter does not result in the rental arrears being paid, inform your tenant that you will be taking the matter further and seek legal action. If your tenant provided a guarantor, you should also write to the guarantor to inform them.
If, after a full month, the rent has still not been paid, and another rental payment becomes due, your tenant is considered to be two months in arrears. At this point the Housing Act 1988 allows you to take legal action to claim possession of the property. This will take the form of a Section 8 notice. A Section 8 notice will inform your tenant that you will take them to court if rent is not paid. The rent should be paid within 14 days of the notice.
If the rent is still not paid you will need to go to court.
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