When we talk to new landlords, one of their primary worries is whether the rent will be paid on time each month and what actions we would take as their agent if it isn’t.
Here at Belvoir Tunbridge Wells, as a result of comprehensive referencing, we are delighted to report that rent arrears are not something we normally have to deal with. In fact, we have just had our first case in many years and in this instance we did manage to get all of the outstanding rent paid. While it is fresh in our minds, it seemed a good time to document what Belvoir Tunbridge Wells do to manage arrears and provide reassurance to our current landlords or anyone thinking of moving to Belvoir.
The rent arrears process
Five days out of seven each week, rental payments received are reconciled against their due date. This is an automated process so exceptions are quickly and easily identified. Discrepancies are followed up with a phone call to the tenant. When the rent remains overdue an initial letter is sent, this letter is mild in tone and questions whether the non-payment may have been an oversight but warns of the need to ensure rent is paid on time. Our aim at Belvoir is always to investigate and try to resolve the situation through polite and respectful discussion with the tenant(s) at the earliest opportunity. If there are problems, we try to work with the tenant to find a practical solution. In most cases, our initial phone call is sufficient to sort out the issue.
If the rent remains unpaid for more than 7 days, we issue a further letter to chase which advises legal action will be taken if the rent is not paid. This is sent even if communications are underway that indicate the rent problem will be sorted out, in order to be thorough and in case the situation is not resolved. We would call you as landlord to keep you up-to-date with the situation.
After the rent is more than 2 weeks overdue, we send another letter to advise the tenant that proceedings in County Court will follow if the situation is not resolved and that an attachment of earnings order could be awarded by the court. Again, Belvoir would be discussing this with both tenant and landlord.
This process of letters and regular contact will continue until the rent is paid or until we can move to legal action.
Legal Notices
After 2 months arrears the landlord can issue a Section 8[1] Breach of Tenancy Agreement notice. This is the first step that the landlord can take to evict a tenant from their property and a valid reason must be given as to why the notice has been issued. The rent arrears in this case would be termed the ‘grounds for possession’. The landlord would need to appoint a solicitor at this stage. As such this is a situation you would probably prefer to avoid because it involves the courts plus additional costs and time so we always work closely with our landlords and tenants to try to find a workable solution before this stage. We can however, fully support our landlords, if they wish to take action, with the detailed records that we have which provide evidence of the clear process that has been followed to try to handle rent arrears promptly and fairly.
The Section 8 Notice is a mandatory precursor to a landlord being able to issue a notice of eviction to take back possession of their property.
The landlord may have an alternative option to taking a property back into their control and that is to issue a Section 21 Notice which requires no reason to be stated for wishing to take a property back. A Section 21 notice can therefore be the preferred option for landlords to remove difficult tenants before an arrears situation can escalate. A Section 21 notice can only be used however to regain possession at the end of a fixed term tenancy agreement or whilst the tenancy is rolling monthly.
Other routes to dealing with rent arrears
Deposits: One option at the end of a tenancy is to take the rent arrears from the deposit that the tenant has paid. This can work if the property has been well looked after and there is just one month’s rent outstanding. This would have to be done with both the landlords and tenants’ agreement. If the tenant does not agree, the case may have to go to arbitration though Belvoir would have full documentary evidence of rents paid/unpaid.
Insurance: Belvoir encourage all landlords to take up a Rent & Legal insurance policy. Under the Belvoir policy landlords have 100% rent protection[2] and zero excess meaning that rent can be paid from the insurance policy from the very first arrears and until vacant possession is obtained (with no time limit). Belvoir will handle all of the admin involved in making a claim. Legal costs are covered and professional court attendance on your behalf can be arranged. When tenants change, the policy is fully transferrable.
Guarantor: Some tenants will have been required to have a named guarantor for their rent during tenant referencing. Belvoir would involve them as early as possible. The guarantor is legally obliged to pay and is therefore in a position to bring some pressure to bear on the tenant.
Record-keeping
The Belvoir team discuss the situation over the phone with both landlord and tenant at each stage of the arrears process until it is seen through to resolution. Every conversation and agreement is documented. If the resolution has to be escalated, there will be no question that our team will have all the necessary evidence of actions taken to resolve the situation.
Need advice?
We are happy to offer free and impartial advice on any property situation without obligation. Simply call Natalie Boardman, Director Belvoir Tunbridge Wells 01892 615406 or email natalie.boardman@belvoir.co.uk.
[1] Section 8 of the Housing Act 1988
[2] Total claim limit of £50,000
