Tips For Private Landlords To Successfully Gather Rent Arrears
Tenants can fall behind on their rent for all manner of reasons, but it’s important to not let the problem get out of hand. We’ve put together our top tips for any private landlords that are having trouble ensuring their domestic tenants pay their rent on time.
1. Obtain information from your tenant up front
Gathering background information from your tenant from the offset is essential when it comes to taking on new tenants as it can really aid recovery efforts should any issues arise. Landlords should gather information such as employment, previous addresses going back 3 years as well as the tenant’s bank account information. These will all make it easier should recovery or legal action prove necessary.
It is also worthwhile at this stage to take up references from previous lettings to ensure the applicant has been a reliable tenant in the past.
2. Set a reasonable deposit level
Setting a fair but substantial deposit level will help to attract tenants from a sound financial background and will also allow you to recoup any costs should any arrears occur.
All private landlords and letting agents taking tenancy deposits in Scotland are required to safeguard them with a Government approved tenancy deposit protection scheme. These are available through either
Safe Deposits Scotland
Letting Protection Service Scotland
My Deposits Scotland.
They will hold the deposit during the tenancy to keep it safe and make sure it’s available to be returned to the tenant at the end of the tenancy, if they've met the terms of their tenancy agreement.
They also offer impartial adjudication service if a landlord and tenant can’t agree on who the deposit should be repaid to at the end of the tenancy. This means they’ll ask the landlord and tenant for further information so an impartial adjudicator can decide what repayment is fair.
Using a tenancy deposit scheme doesn’t incur any additional costs to either landlord or tenant and they ensure that:
- All tenancy deposits are securely held and protected
- All disputes about the return of the deposit are resolved quickly and fairly
3. Keep a record of payments
Keep a record of when rent payments are due and when these are paid by your tenants.
When payments are received send a receipt to your tenants each month when their rent payment in received. The receipt should detail when the payment was made, the time period it covers, the amount paid and any amount outstanding.
Being able to provide clear statements of accounts, which detail all transactions that have taken place on a specific tenant’s account, is very useful as it helps resolve any disputes raised at an early stage.
4. Write to the tenant
If a rent instalment becomes overdue and isn’t paid after several days start by calling your tenants to ask why the payment hasn’t been settled. If you can’t reach them by phone or you feel your requests aren’t being taken on board, send them a formal written demand using a recorded delivery postal service so you have proof that they have received the letter.
The letter should request that the outstanding balance should be paid immediately and should ask the tenant to ensure that all future payments are paid on time to avoid falling in to arrears again. You should explain that any unpaid arrears could result in court action being taken against the tenant and state that they will receive a Notice to Leave if the arrears remain unpaid.
5. Send a letter to the guarantor
If the arrears are still outstanding 14 days after they are due and your tenant has provided a guarantor, send the guarantor a letter advising them that the tenants haven’t paid the rent in line with the tenancy agreement.
6. Serve a Notice to Leave
If after 21 days the arrears remain unpaid, send a third letter to confirm your intention to take legal action if the unpaid rent is still outstanding. You should also send another letter to the guarantor to inform them that the rent still hasn’t been received.
If after a month the rent is not paid and another month is now due, it is time to consider ending the tenancy. To do so, you must give your tenant a Notice to Leave with supporting evidence which shows the tenant why this is happening. The document should tell them which of the eviction grounds applies and how long they have to move out of the property. When a tenant has fallen behind in payments it means they have breached a term of the tenancy agreement. In these cases 28 days’ notice is required.
The Notice should be delivered in one of these ways:
- By handing it to the tenant
- By sending it them by recorded delivery post at the address of the Let Property (you must add two extra days to the notice period when using this method)
- By emailing it to them at their current email address, if they have agreed this is their preferred method of contact (you must add two extra days to notice period when using this method)
7. Apply to the First-tier Tribunal for an eviction order
If you give your tenant a Notice to Leave and they don’t move out as soon as their notice period ends, you can apply to the First-tier Tribunal for an eviction order. You must do so within six months of the date you gave your tenant in the Notice to Leave. The local authority must also be made aware of your intention to apply.
When applying you must provide the First-tier Tribunal with a copy of the Notice to Leave, stating which grounds for eviction you are using along with the supporting evidence for this.
The Tribunal will then consider your case and decide whether the eviction ground exists. In cases where a tenant is in arrears it is classed as a mandatory eviction ground. In these cases where the Tribunal is satisfied that the ground exists, they must grant you an eviction order. Once this has been granted contact our experienced team here at AMA who will guide you through the eviction process.