How to prevent your tenants from falling into arrears?
As a landlord, you expect your tenants to pay their rent each month. However, you have a little control over your tenants, who for some reason may fall behind on rent payments. When your tenant is late with the payment, you should contact him/her as quickly as possible. It may be caused by problems at work, redundancy or some unexpected expenses. The longer it takes, the more the problem escalates, causing also issues for you, as a landlord. Even in the most frustrating situations, however, you should stay calm and try to solve the problem on your own before hiring a lawyer and evict a tenant.
If you feel like you don’t know your tenants well enough and there is a chance that such a situation occurs in the future, take a few steps to prevent it.
- Keep the records up to date
This way you will be able to control all funds coming in and out of the property. It is especially significant when you have more than one tenant in your property. Furthermore, if the tenants are renting the house based on joint tenancy agreement you must make them aware from the beginning of the tenancy that they are equally responsible for any debts or delayed payments as a single unit.
- Stay in touch
with the tenants and visit the property on a regular basis. Try to be available for your tenants in case of any problems, issues and questions regarding the property. Tenants that have a good relationship with their landlords are more likely to take care of the house or flat and pay on time.
If, however, the payment due date has been exceeded, contact your tenant immediately to clear the situation and ask for reasons for the delay. If it has been few days and you cannot reach the tenant, send an official reminder in a form of a letter informing about the last unpaid rent. In the letter request an immediate payment and ask the tenant for reassurance that such situation will not repeat in the future. If you have had already some troubles with your tenant in the past, you may also add a statement that unpaid rent may result in a court action taken against the tenant.
- Make the payments clear and easy
In the tenancy contract state the exact date of the monthly payment to make sure that tenants understand their responsibility. If you are worried about the arrears or any misunderstandings in the utility payments you may decide to use a specialised service that will take care of the utilities around your property. This way you will be sure that the incoming bills are accurate to the actual energy consumption.
In the worst scenario, after two months passed and you still have not received any payment from your tenant, you may want to take a legal action.
Thus, try to always allocate credible tenants in your property, keep in touch with them and state all payment issues in the contract before they officially move in.