Rent Arrears by Heather Hilder on January 10, 2018 Landlords – are rent arrears leaving you financially challenged?You’re filled with the flush of successfully renting out your property, and your tenants have moved in having paid their deposit, and first month’s rent in advance. All is looking rosy – but the ongoing concern for all Landlords is that rent is paid throughtout the tenancy.Your Letting Agent will have, should have, ‘referenced’ your prospective tenants before processing their application to rent, made clear Tenants’ obligations relating to rent payment, and obligations under the Assured Shorthold Tenancy (AST), clearly showing when the rent is payable and the amount, and what to do if the Tenant finds himself in a position where he can’t pay.A reputable agent’s Terms of Engagement will contain a clause about how rent arrears are managed in case of late payment or default. The agent should be in regular contact with the Tenant, and as soon as the rent doesn’t appear in the Client Account, must get in touch with the tenant to find out if there has been a momentary lapse of memory on the due date, or whether there has been a genuine case of financial difficulty in paying the rent.Often, it is simply down to the Tenant having forgotten to set up a standing order, or a bank holiday delaying payment, or even the tenant arranging to go on holiday when a rent payment due date comes up, and forgetting to set the transfer up in advance!Generally, we find that a ‘heavy hand’ is not always needed – a gentle reminder is all it takes on most occasions, and the tenant is most apologetic and makes payment almost immediately.An ability to negotiate with the tenant is a pre-requisite, there may be a need to compromise, or change a ‘rent due date’ following eg a change in the tenant’s employment and salary pay dates. It goes without saying, that any changes must be recorded and issued by drawing up an Addendum.In our experience, Tenants often find it easier to speak to the Letting Agent than go direct to their Landlord – and we have arranged payment plans suitable for Landlord and Tenant to get back on track.We find that if Landlords become overly friendly with their Tenants, it can be difficult to ask for rent; therefore having an impartial agent (who is there to ensure rent is paid to their client, the Landlord) is often simpler.Your Letting Agent is not as emotionally attached to the non-payment of rent as is the Landlord, and in all circumstances we, at Callaways, adopt a level-headed and business-like manner. The last thing either the Letting Agent or Landlord needs is to be accused of harassment if too much pressure is applied on the non-paying Tenant.Our recommendation for Landlords looking to engage a Letting Agent to manage his properties is to talk to at least three letting agents and to find out whether they have a well tried, tested and trusted rent arrears procedure.If (worst case scenario) your Tenant fails to pay rent consistently and continually, your agent should know how to issue Section 21 or Section 8 Notices, to keep your losses to a minimum.How many Tenants fall in arrears? Callaways on average have less than 1% rent arrears, but we notice that after the Christmas period, when generally people have overspent, this spills over into rent payments. We always explain to Tenants that paying rent should be at the top of their list, it is just one of those bills that should be paid! And if they ever have problems they should come to us first rather than ignoring the issue.Tenants are generally asked to provide Landlord references when they move properties – and as agents, we are asked to provide details of whether rent has been paid on time, and kept up-to-date. Our records are very accurate!We believe it is worth trying to work out rent arrears in the first instance, and come to a solution that suits Tenant and Landlord – otherwise, there will be void periods and additional charges to replace the Tenant and prepare the property for a new let.Where the Landlord has Legal and Rent Protection, he should consult first with his insurer before negotiating rent arrears.There are many legal requirements and documents that need to be issued at the beginning and during the tenancy – all these requirements have to be met to enable a Section Notice to be issued and for a Court to agree.Lastly, if an eviction has to take place (generally a last resort) all documents will be required by your Solicitor to manage the process – and letting agents will have copies of all correspondence on file.Having trouble collecting rent, or are you regularly chasing your tenant for rent? Callaways often a Tenant Find & Rent Collection Service. Call Kerry 01273-735237 for more details.