When tenants on contracts registered in England don’t pay their rent, it can present a major headache to a landlord for all sorts of reasons. In this article, we drill down on the issue of non-payment of rent to look at what you can do to recover money owed. Perhaps more importantly, we also look at how you can mitigate the risks when a tenant hasn’t paid with insurance protection.

Here are five steps you can take when your tenant hasn’t paid their rent:

1. Keep track of how much your tenant hasn’t paid

It is important for landlords keep accounts up-to-date at all times, particularly if you have a tenant not paying rent. This can be done simply by sending receipts when tenants pay their rent; noting the date the payment was made.

For a tenant not paying in full, you should detail on the receipt the amount paid and how much remains outstanding. This is especially important if you have a property of multiple occupation with tenants on separate contracts. You should be able to see at a glance who owes any rental money to you.

If there is a joint tenancy agreement in place, remind all parties that they are equally responsible for the rent and clearing any outstanding balance as a single unit.

Keeping records also helps if you have to make an application for possession on the basis of non-payment of rent because you will be required to provide copies of all transactions.

2. Write to the tenant requesting they pay the rent

If the tenant hasn’t paid you after several days, a landlord can initially call their tenant to see what is going on. Should calls be ignored or you are unable to deliver this message, you should write to the tenant with a formal demand.

The letter should state clearly how much is outstanding and request the unpaid rent be cleared immediately. You should also request that your tenant ensures all rent is paid in full and by the due date going forward.

You should also make it clear that if any outstanding balance remains unpaid, you are prepared to take court action to recover your money. This action would comprise of an application to the court for possession and can be taken when arrears have accumulated to more than 2 months’ rent.

3. Write to the guarantor

Many tenants have guarantors and if there is an outstanding balance on their account, you should advise their guarantor of the situation.

You should give your tenant around 14 days to provide resolution but if you are still waiting to be paid, write to their guarantor.

In this letter you should state that you will take the matter further if the money owed remains unpaid, highlighting the relevant terms of the agreement.

Usually, this letter to the guarantor is sufficient to get landlords paid swiftly.

4. Apply for a possession order

If you have had no response from your tenant after 21 days, it is time to send a third and final letter. In this letter, you should clearly state that you intend to take legal action if the arrears remain unpaid. Then you can send another letter to the guarantor to advise them that you have not received the outstanding rent.

If a month has passed and the tenant is due to pay another month’s rent, they are to be considered as being two months in arrears. Under the Housing Act 1988, you can now take action and apply to the court for possession of your property.

Once this application has been lodged, you should serve a Section 8 notice which informs tenants of imminent court proceedings if the arrears are not cleared within 14 days.

A Section 8 notice has to be served in accordance with legislation making it important to stick closely to the eviction process. For a Section 8 to be valid, you must:

  • Complete a ‘notice seeking possession of a property let on an assured tenancy or an assured agricultural occupancy’
  • Detail the terms of the contract that your tenant has broken
  • Give from 2 weeks’ to 2 months’ notice to vacate the property, depending on the nature of the breach of the contract
  • Make an application to the court for an order to be dated for when the property is to be vacated to serve if the tenant doesn’t leave voluntarily
  • If you are not claiming back any rent arrears, you can apply for an accelerated possession order to bring forward an eviction

5. Have your day in court

If all demands for rent are ignored by your tenant and the arrears left unpaid, you can take action to regain possession of your property. At the same time, you can ask the court to make a judgement (CCJ) against the tenant to recover arrears and any reasonable costs incurred by proceedings.

If you don’t have a valid reason for the eviction or haven’t closely followed eviction procedures, the judge will automatically dismiss your case.

Courts can order tenants to do one of the following:

  • Quit the property before a specified date, when the landlord has the right to change the locks
  • Allow tenants to remain in situ if they commit to clearing their arrears
  • Pay the landlord a specified sum
  • Vacate the property and pay a specified sum to include arrears and legal costs

Advice on Eviction during Coronavirus Pandemic

According to government advice as of 26 April 2021, most evictions of tenants remain on hold until after 31st May 2021, although there are limited exceptions to this rule. After the end of May, the government has committed to lifting the eviction ban.

Under coronavirus rules, tenants are entitled to 6 months’ notice before you are able to go to court to recover arrears or evict them.

Even when there are rent arrears, landlords are still responsible for all repair and safety checks to the property. However, if the repairs are non-urgent or you are self-isolating or shielding, any work to the property can be delayed.

How you can Protect Yourself from Crippling Rent Arrears

There are specific insurance policies providing cover to landlords for non-payment of rent. This is an important consideration for landlords when making the initial purchase of a BTL property, particularly during the pandemic.

Although rent arrears are not a new risk to landlords, they are currently growing at an alarming rate nationally due to the coronavirus crisis.

According to Citizens Advice, in January this year the average amount owed on rent was more than £700m, with an estimated £360 million owed across England and Wales.

Landlord insurance makes sense if you are renting out a residential property because you have a great deal of statutory responsibilities to consider. For example, you have to ensure that your property is maintained to a specific safety standard to protect your tenants and the building.

However, you also need cover for when things go wrong. Landlord insurance may be able to help you with comprehensive coverage to ensure your rental revenues aren’t damaged when a tenant stops paying their rent.

For a monthly premium, landlord rent guarantee insurance takes care of the costs of recovering unpaid rent or evicting a difficult tenant. This means you don’t have the hassle or the headache if any of your tenancies go wrong.

At Emerald Life while we cannot help with issues arising from tenants refusing to pay rent, we can help if your property is made uninhabitable and you lose rent or have to provide alternative accommodation as a result.

What can you do if a tenant doesn’t pay rent?

It is always important to find out why a tenant has fallen into arrears. They may have had a sudden change in financial circumstances or had a one-off urgent expense to pay instead. Alternatively, they may have fallen into arrears when they may be able to pay which has led to a difficult relationship between you.

Depending on how well you get on with the tenant you can choose to negotiate with them informally at first and try to find a solution or follow the processes set out above to remove them from the property.

How many days can a tenant be late on rent?

A landlord must start communicating with the tenant after several days. It is important to acknowledge the debt in the same month as it provides sufficient time to resolve before the rent is due again. A tenant has to be more than 2 months’ in arrears before seeking possession.

Can you kick a tenant out for not paying rent?

The simple answer is yes but it is VERY important that you follow legal processes. Tenants have strong rights which are protected. For these reasons, it is vital that you follow the steps outlined in this article if you are seeking to make a tenant leave for not meeting rent payments.

How long does it take to get evicted for not paying rent UK?

It usually takes 2 to 6 weeks to regain possession once a court has made the order. You can also apply to the court for an eviction order for the same day as you get your property back and bailiffs can remove any tenants that remain there and change the locks.