In today’s economic climate, where unemployment is on the rise and the cost of living is continually increasing, non-payment of rent is becoming a serious problem for landlords. The payments that a landlord receives from their tenant will undoubtedly account for a large proportion of their revenue, often leaving them with no option other than to take action and pursue the tenant’s rent arrears themselves. However, the best way to do this isn’t always obvious; so what should you do if your tenants rent payments are in arrears?
Keep a Detailed Record of All Payments
Firstly and most importantly, you should keep a record of all payments that are owed to you and when they are due to be paid. This will enable you to keep track of any late payments, as well as providing you with valuable evidence if you need to take your tenant to court for non-payment. If your tenants are part of a joint tenancy agreement and it is important that you make clear to them that they are equally responsible for any rent arrears and that the debt must be paid mutually.
Come to an Agreement with Your Tenant
It is always a good idea to get any financial issues sorted as quickly as possible – if you let the situation drag on for months the debt will eventually spiral out of control. Contact your tenant screening by letter, phone or in person and try to come to an arrangement in regards to the debt. If you have a particularly difficult tenant who appears to have no intention of paying their rent or arrears then you may need to take further action.
The Next Steps
If you do not receive correspondence from your tenant or if they refuse to pay the debt then you have a number of choices available to you. These include:
Writing Off the Debt
For some landlords, the stress and time involved in chasing a debt may seem like more effort than it is worth and in this case they may choose to write off the debt. For some individuals this may be the best course of action to take, as pursuing the debt further would not prove to be financially viable.
Proceeding with Court Action
If you have followed the correct procedures and given your tenant every reasonable opportunity to pay their rent arrears, to no avail, you are then permitted to begin court proceedings. However, this can often be a long and expensive process; so be prepared.
Selling the Debt to a Debt Collector
A debt collector will either buy the debt off you or pursue the debt then charge you a fee once they secure payment. This fee will usually be a percentage of the monies secured. No matter what debts you are owed, it is important that you do not compromise your reputation. If you are planning on selling your debt to a debt collector it is essential that you select a company that will pursue the debt in a way that reflects your own personal principles.
Tracing a Debtor
In some cases a debtor will leave a property with rent still owing. In this case it may be necessary for the debtor to be traced to another address. Again, this is something that may be best handled by the professionals who have the tools and resources to find the debtor with minimal disruption to you.
When trying to get back any money that is owed to you for rent it is important that you remember that there is not a single solution to every problem. Make sure that you tailor your action to suit your situation and you will have the best chance of securing the maximum payment for the least cost.
Author: Credit G Ltd
