Rent arrears in the UK: What do if the tenant is not paying rent?

Discover your rights as a landlord when tenants stop paying rent. Learn how to handle rent arrears and eviction and protect your interests.

Jale

3 minute read

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22 Mar 2024

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Renting out

Are you concerned about a tenant not paying rent? As a landlord, missed payments and rental arrears can cause significant stress when renting out a property. It can be challenging to cover your expenses, such as mortgage payments, property maintenance, and utility bills, when faced with a tenant who doesn't pay rent. However, understanding your rights and following the appropriate steps can help you resolve the situation and protect your interests.

This comprehensive guide will walk you through the process of dealing with rent arrears and what to do if your tenant is not paying the rent.

If your tenant is not paying rent, you have a few options to take action.

1. Communicate with your tenant about rent arrears
2. Contact your insurance provider
3. Contact the guarantor
4. Send eviction notice for non-payment of rent
5. Take a legal action

The first step in addressing rent arrears is to open a line of communication with your tenant. If the rent remains unpaid after several days, start by reaching out to your tenant via phone, text, or email to check in on the situation. If there’s no response, send a formal letter by mail or hand-deliver it.

In your letter, politely request immediate payment of the outstanding arrears and emphasise the importance of future payments being made on time. Mention the potential consequences, such as court action, if the arrears persist. Remember to maintain a polite and sensitive approach throughout the process.

If your tenant is facing financial difficulties, you can suggest they seek advice from organizations like Step Change or Shelter.

Offer a repayment plan for the rent not paid

To facilitate resolution, consider proposing a repayment plan to your tenant. This plan can involve spreading the owed amount across future rent payments, offering a more manageable solution than eviction. While there's no obligation to do this, it can be a practical option.

Many landlord insurance policies cover missed payments and tenant arrears. Contact your insurance provider to understand the coverage, claim process, and reimbursement limits. If the tenancy ends with outstanding rent, you can recover this from the tenant's deposit through a relevant tenancy deposit scheme.

Keep detailed records

As a landlord, maintain accurate records of rent due dates and payment history. Send receipts to tenants specifying payment dates, amounts, and outstanding balances. If it's a joint tenancy, remind tenants of their shared responsibility for rent and debt clearance. These records will be crucial if you need to take legal action.

If rent remains unpaid for another 14 days, send another letter to your tenant explaining the potential consequences of non-payment. Make sure to mention these consequences can include going to court.

If there's a guarantor, inform them of the tenant's breach of the tenancy agreement.

If, after 21 days, rent still remains unpaid and your tenant has not communicated or taken steps to resolve the situation, you can proceed with legal action to reclaim your property. This can be done through a Section 8 or Section 21 notice under the Housing Act 1988.

• Section 8 notice: Informs the tenant of your intent to go to court if rent remains unpaid after 14 days. You must have a valid reason with proof, such as rent arrears receipts.
• Section 21 notice: Typically used when the fixed term of the tenancy is ending, it doesn't require specifying a reason for eviction.

To make sure the Section 8 notice is valid, you must use the correct form and follow the process carefully.

To give your tenants a Section 8 notice, follow these steps:

1. Fill out the Notice seeking possession of a property let on an assured tenancy form (form 3).
2. Clearly state which terms of the tenancy have been broken in the notice.
3. Provide your tenants with a notice period of 2 weeks to 2 months, depending on the terms they've violated.
4. If the tenants don't leave by the specified date, you can ask the court for a possession order.

If the tenant pays the overdue rent, the Section 8 notice won't be valid in court.

Please note that the government plans to ban Section 21 no-fault evictions with the Renters Reform Bill in the future. So, staying informed is crucial. It's also advisable to consult legal counsel if needed.

If your tenant doesn’t respond to your demands for rent or challenges the eviction notice, you can proceed with legal action to regain possession of your property. You may also request a judgment against your tenant for rent arrears and related costs. You have up to 6 years to enforce a monetary judgment against the tenant.

The court may order the tenant to:

1. Leave the property by a specified date.
2. Stay in the property while adhering to conditions.
3. Pay a specified amount.
4. Leave the property and pay for arrears, court fees, and legal costs.

Remember, the judge will reject your case if there’s no valid reason to evict the tenant or if you haven't followed the correct procedure.

Always approach the matter with sensitivity and seek legal advice when necessary to ensure compliance with evolving eviction laws.

This article is for informational purposes only. Please consult the appropriate authorities for the latest developments or a lawyer for legal advice.

For feedback on this article or other suggestions, please email content@housinganywhere.com