Rent arrears

Every landlords nightmare is that your tenant falls into arrears with your rent, and you have to take action to get the money back. In the mean time you have to cover the rent and still support your own lifestyle.

One of the ways to protect yourself from the large effects of rent arrears is to actually take out some kind of insurance. Its fairly reasonably priced considering what it covers, and if you do need to claim - at least you have support to get the arrears back. If you don't take insurance, and think that you would try to claim the arrears back by yourself, you can get to a point where you make a mistake that costs you in more ways than one! When you are angry and need the money, all sorts of thoughts do run through your head - its natural - we are angry, someone owes us money, and we trusted them. The most common thoughts are turning off utility supply, changing the locks, emptying the property, sending someone around to "sort them out. These are not good things to do, you can end up in prison - so better to take them to court using official route. Even taking a tenant to court for rent arrears does not necessarily mean you are going to get the rent back. The tenant may make claims against you, could go bankrupt (because it is very very easy to do this), and they could take their own frustrations out on you and your property.

So my personal thoughts on this topic are to takeout appropriate insurance Against rent arrears and bad tenants. Take a look at my page on Landlord rent protection insurance for more details

You can considerably reduce the risk of rent payment problems by taking out a credit check on your tenants as well. The tenant actually pays for this themselves, so it is no risk to you.

If your tenant actually does slip into rent arrears, you need to take instant action, and let them know that it is not acceptable, you don't want to get into a pattern of late rents all the time. If they have problems with the date because it does not coincide with when they get paid - negotiate to move it.

You should ideally find out exactly why it has not been paid right away - it could just be a bank error, or even a genuine cheque lost in the post. More often than not the arrears are a genuine mistake - but if it carries on and on you do need to take action. If your tenant has lost his job for instance, you may wish to leave a month and let them spread the rent arrears between the next few months to make things easier for both of you.

TIP - Best tip I can give you is to keep your tenant on your good side no matter what. Maintain a friendly relationship if at all possible, as this makes things easier. It's harder for the tenant to be nasty to a nice landlord than a landlord you consider to be harassing you and nasty. The penalties for harassment are very severe and have resulted in prison terms and huge fines (over £10,000)

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