When you buy to let, the benefits seem obvious: the rental income will pay off the mortgage, and after a given time frame you will receive a healthy supplement to your income from your additional property or properties.
However, letting out a property can equally be a nightmarish experience which results in you losing money and possibly defaulting on your mortgage if a tenant refuses to pay.
Key Takeaways
- Tenants are responsible for paying rent as outlined in their housing contract, and landlords have the right to pursue the money and or ask them to leave
- Open communication between tenants and landlords can resolve many
- Keep a record of payments and a proof of correspondence requesting payment.
If you are already in a situation where your tenants are living in one of your properties and not paying the rent, the obvious solution is to first communicate with your tenants, and if all else fails to evict them and get other tenants into your property, but you need to follow the correct procedures first. And always remember the golden rule: keep a record of payments and a proof of correspondence.
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Contact your Tenant to Request the Payment of Rent Owed
Follow these steps:
- Send your tenant a formal demand by post and/or email – wait two weeks and then proceed to step 2 if you still haven’t received payment
- Contact the guarantor if your tenant has provided one, advising them that rent is in arrears
- Still no luck? Contact your tenant in writing and/or email, once again to let them know that they are in arrears and let the guarantor know that you will be taking legal action if the rent is not paid.
Tenants won’t pay rent: Eviction and Legal Action
Follow these steps:
- If you still have not received the rent owing to you, you need to give your tenant notice to quit to inform them that they must vacate your property.
- If they have not vacated your property within the time frame given on your notice to quit, you now need to give them notice to seek possession – you now you do need to take legal action by applying for permission to take possession.
- The last step in getting your tenants evicted is to apply for a warranty for eviction where bailiffs will remove the tenants from the property at which point you can have your locks changed and request that the court make a judgment for the rent in arrears and reasonable costs incurred.
Remember that legal costs can also put a dent in your pocket, so the best way to protect yourself financially if you have rental properties is to take out landlord’s insurance which includes legal protection.
Follow the above steps if your tenants won’t pay the rent owed to you.
Managing Your Stress As A Landlord
When a tenant refuses to pay rent, they may think that they are committing a victimless crime, given that you must have plenty of money in the bank and a whole host of properties. The truth is that many landlords are professionals and families who own a single rental property that they are using as a nest egg.
Having to cover a second mortgage and deal with constant uncertainty can be stressful. With this in mind, you may find the following points helpful:
- You are within your rights to be paid the money you are owed, and you are doing nothing wrong by pursuing it
- Many buy-to-let lenders will have systems in place to help landlords who have a problem tenant, reach out rather than struggle in silence
- Thousands of similar issues are settled every year. You have not done anything wrong, and this will come to a conclusion
What To Do If You Can’t Pay Your Rent?
As a tenant, you have a legal obligation to follow the terms and conditions that are laid out in your housing contract, chief of which is the timely and full payment of rent. That said, there may be unforeseen circumstances that make it difficult to do so in the short term: injury, illness, mental health, bereavement, and unemployment are all common examples.
If you can’t pay your rent, whatever the reason, the first thing to do is contact your landlord at the earliest opportunity. Making every effort to talk to them before you miss your first payment, and to outline your situation clearly and concisely, is really important. It is the best way to generate goodwill and give yourself more breathing space.
Here are some key points you should make yourself aware of:
- You cannot be evicted straightaway for missing one monthly payment
- Landlords are business owners who have their own overheads, so they value communication
- Many landlords will prefer to put a plan in place with you and to help you than to put their property back on the market
- Talking to your landlord and taking control of the situation may be daunting, but it stops the stress from building and building
If in doubt, a good rule to go by is to approach your landlord before they approach you. The chances are that they will be understanding of your situation and will have plenty of experience in helping their tenants get back on track. While they are under no legal obligation to do so, they may offer to accept partial payment or freeze your rent for a fixed period of time, provided that you pay the outstanding balance by a pre-agreed deadline.
