Six top tips for landlords to minimise rent arrears and ensure prompt payments
In an ideal world, tenants pay their rent on time, every time. However, in the face of more economic uncertainty, with rising living costs and funding cuts impacting household finances, the potential for tenants falling behind on payments is ever present.
As a property dispute management organisation, the Strikes Property Services Group team deal with the sharp end of these financial difficulties. In many cases, we see that unpaid rent could have been prevented by taking a few simple steps.
Read on to learn my 6 top tips for minimising the risk of late or missed rent payments...
1. Thorough tenant referencing:
Know who you’re letting into this property - don't rush this bit! A proper credit check, previous landlord references and employment verification are essential, as is a solid history of reliable rent payments. A good letting agency will do this as standard, but if you self-manage, don't skimp, call upon a reputable tenant referencing company, like Strikes or the NRLA.
2. Watertight tenancy agreements:
This document is your legal bedrock. Make sure the tenancy agreement is clear and understood by both parties as any ambiguity could come back and bite you later on. The agreement must clearly state the rent amount, payment dates, and the consequences of late payment. It’s best to have a solicitor draw up the contract to ensure it complies with current legislation. And of course, the NRLA provides excellent tenancy agreements that you can use if you’re a member.
3. Open and consistent communication:
If tenants know you are approachable, they are more likely to talk to you before problems escalate. Provide tenants with clear contact details and encourage them to let you know if they have any financial difficulties as soon as possible. Early warning is better than a nasty surprise, and many issues can be resolved with an open and honest conversation.
4. Automate payments:
Encourage tenants to set up direct debits or standing orders. This reduces the risk of missed payments due to forgetfulness or other excuses – and it makes it easier for you to track payments too.
5. Don't let rent arrears slide:
Always follow your tenancy agreement's procedures for late payments. Send out polite but firm reminders as soon as a payment is missed. If the tenant doesn’t pay, contact a property dispute resolution service provider, like Strikes well before arrears become unaffordable. Delaying action only makes it harder to recover the debt and can lead to larger, unrecoverable losses. Don't be afraid to use the legal system if you need to, it is there to protect you as well as the tenant. Strikes guides landlords through every step of the process, from paperwork to eviction if necessary.
6. Go for tenant guarantors
For added piece of mind, it’s worth considering tenant guarantors as a requirement, especially if your tenant hasn’t got the best credit rating or it’s their first time renting. But remember, guarantors are only worth having if they can cover the rent - you must ensure that the same thorough checks are carried out on guarantors as tenants.
If you’re facing any challenges with your tenants, please don’t hesitate to contact Strikes on 0113 3229555 or [email protected].
We offer tenancy eviction packages, plus a 10% discount on our services for NRLA members.
