Rent Arrears & Landlord Rights
What are Rent Arrears?
Rent arrears refer to the amount of money a tenant owes their landlords, it occurs when a tenant doesn’t pay their rent on time. Rent arrears can cause financial difficulties for landlords, especially if they rely on rental income to pay for their own bills.
Rent arrears can be a frustrating and stressful experience that landlords face. It is important for landlords to know and understand their rights and responsibilities when dealing with rent arrears. Landlords have the right to pursue debts and a debt collection agency can guide you through this process. Some publicised legislation that appears to support tenants in disputed rent arrears, such as the Tenancy Fees Act can concern landlords. Don’t let this put you off collecting rent arrears.
Rent Arrears Collection Agency
The process of collecting rent arrears is clearly laid out by the UK government. We recommend engaging with a number of debt collection agencies that specialise in helping landlords collect private rent arrears. Gathering a number of quotes from experienced debt collection agencies will help you find the best debt collection agency for rent arrears.
Fill out our quote tool at the bottom of the page and we will put you in touch with experts who can help you with the collection of rent arrears from ex-tenants or help private landlords set up a payment plans with existing tenants.
The 4 steps below will broadly explain the process your debt collection agency is likely to follow:
Maintain professionalism and document your initial requests for payment.
Issue a recorded late rental payment notice.
Issue a further reminder after sufficient time has passed (usually 14-21 days).
Issue a Final Notice or Letter Before Action (LBA).
Begin Court Proceedings to obtain a County Court Judgement.
Document A Request For Payment
The relationship between tenants and landlords is a complex one and can be across a considerable amount of time. With this in mind, we recommend a polite and professional request for payment once it is late. This is because genuine oversights can occur that lead to late payment - family issues, banking errors, employment changes to name a few. These can all be resolved and allow the relationship to continue and keep your property occupied.
Late Rent Payment Notice
Following a polite and documented notice to request payment you must now document that rent is overdue. Although this can be a relatively simple letter we have seen cases resolved at this stage when this late payment notice is delivered by an enforcement officer from 3rd party debt collection agency.
This letter will explain the current arrears situation and the consequences of not resolving or settling the debt. The tenant at this stage may request a payment plan to settle outstanding debts to prevent court proceedings.
Send A Final Reminder
If the rent arrears have not been collected or a payment plan set up following the Late Payment Notice letter, a final follow up notice should be sent. At this stage you should involve any guarantors for the tenant explaining the current situation and consequences should this continue. At this stage, it is made clear by the debt collection agency that you will be looking to recover the property as a landlord collecting rent arrears.
Apply To The Court
The process of regaining possession of your property can only begin after 8 weeks of arrears. This is why we recommend the staggered approach to Request For Payment Letters, Late Payment Notice and Final Reminder Notice. These steps help progress this process and offer opportunities to resolve the outstanding debt before legal proceedings are required.
A number of options are available to landlords looking to collect rent or repossess a property at this stage, the 2 most common are Section 8 and Section 12 notices. Your chosen debt collection agency will advise alongside their solicitors on this.
The process will remain the same but depending on the size of your rental portfolio you may want to speak to a commercial collection agency or a personal debt collection agency. There are also benefits of working with a local recovery team if you are based in London, Birmingham or Manchester.
