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How to deal with a tenant who hasn’t paid their rent

Posted on October 10, 2016 by Isak Botma in Property Management
How to deal with a tenant who hasn't paid their rent

How to deal with a tenant who hasn’t paid their rent

Rental properties are one of the most lucrative investments that anyone can make in the modern age. After all, the rise of generation rent and the fact that more people than ever before want to live in the PRS means that rental prices climb year after year, and the income that both landlords and letting agents can make rises.

However, there are always risks to this level of return that can arise from time to time, and it’s important that letting agents in particular deal with these problems straight away to protect returns and ensure that problems don’t escalate.

There are any number of reasons that people can fall behind on their rental payments, be it because Christmas is coming, someone’s lost their job or they’ve had to pay for repairs to their car, for example, but for letting agents, the important thing is addressing the issue as soon as possible before the arrears become serious. So what is the best way to go about this as a letting agent ‘

Call the tenant

The first stage when you realise that a rental payment has been missed should always be to make contact with the tenant straight away. Chances are that they will be embarrassed or worried about missing a payment on their rent, and as such the majority of tenants will not get in touch to offer an explanation themselves.

Make sure you call the tenant in the first instance to ascertain why the rental payment wasn’t made. If you are using a form of contact that they can see and then choose not to reply to, you risk being ignored and having to go through a more strenuous avenue to get in touch and find out what’s wrong.

Send a letter/email

If you can’t get in touch with the tenant via phone call, the next option you have is to send them a letter or email with official notification that their rent is late. This is less personal, and doesn’t give you a chance to talk through the tenants’ problems with them, but it’s sometimes the only way that letting agents can get in touch, and it can be necessary in order that tenants can’t claim they never knew their rent hadn’t been paid.

If you are contacting them via this method, remember to give the tenant a chance to contact and talk through problems with you. It’s still possible that someone is just having short-term issues in paying their rent. Perhaps they even simply forgot, so give them the chance to get in touch, and let them know that you want to help.

Be open to help

On that note, it’s vital that as a letting agent you are open to helping out your tenants. Remember that they will more than likely be very worried about not having paid their rent, so when you do manage to talk to them, let them know that you want to help. After all, you both want the rental issue to be put to bed as soon as possible, so working together is the best way to get what everyone wants.

There are a number of different strategies that can be put in place to help someone get back on track with their rental payments. For example, if they are a bit short, you can offer them the chance to pay back their missed month in instalments, while you might also opt to let them pay a month in lieu, or sort it out with their guarantor. Whatever the strategy you offer, the most important thing is that you let the tenant know you want to help, which will allow them to be more open and work with you to resolve the problem.