As a buy-to-let property investor, your worst nightmare has come true. Your tenants having trouble paying their rent. What should you do and more importantly, what can you do legally?
Write to the tenant
Communication is important! If the rent hasn’t been paid after several days, start calling or emailing your tenant and ask them kindly to pay their rent. People can be forgetful. It’s entirely possible that they just forgot to pay.
In a bad scenario, when calls fall on deaf ears, then it’s time to send your tenant a formal written demand requesting the outstanding arrears to be paid immediately.
In your letter, you should explain that unpaid arrears could result in court action being taken against the tenant.
Send a letter to the guarantor
Assuming you still haven’t received the rent after 14, send another letter explaining that you’ll take the matter further and seek possession of your property if they don’t pay immediately.
If your tenant has a guarantor, send the guarantor a letter advising them that the tenant hasn’t paid the rent according to the tenancy agreement.
Normally, the guarantor will help and the arrears will be paid soon after this letter.
Claim possession of your property
It’s 21 days after the rent payment date and you still haven’t heard anything from your tenant. It’s time to send a letter to confirm your intention to take legal action if the rent isn’t paid. Send this letter to the guarantor too, so everyone is up to date.
If your tenant has gone a month without paying rent, and another month is now due, you can consider your tenant to be two months in arrears.
At this point you have the right, under the Housing Act 1988, to take action to claim possession of your property.
Serve a Section 8 notice in the UK
Serving a Section 8 notice inform your tenant that they’ve broken the terms of the tenancy and you intend to take them to court. You can read more info on how to do this here.
Go to court
If your tenant doesn’t respond to your demands, you are legally entitled to take legal action to seek possession of your property.
Please keep in mind that the judge can dismiss your case if you haven’t followed the right process.
It’s also good to know that some insurance companies supply cover to landlords that will protect them from missing rent payments.