Tenants who don't pay their rent, or who fail to pay on time, can be one of the most frustrating and time-consuming aspects of being a landlord.
And while some may argue it's par for the course when running a rental property, the costs involved trying to fix the problem of a non-paying tenant can be hugely damaging.
But as frustrating as it is, there is a process you need to follow as a landlord when dealing with a tenant not paying rent in the UK.
In this guide, we’ll explain what you need to do if your tenants aren’t paying their rent…
Can I evict my tenant for not paying rent?
If your tenant is not paying their rent as per the terms of their tenancy agreement, it’s possible for you to start eviction proceedings against them.
However, you must follow the correct procedures (outlined below) to legally evict your tenant when they’re in rent arrears.
How long can a tenant not pay rent before eviction?
If a tenant is at least two months in rent arrears, you can seek to evict your tenant with a two-month notice period.
For rent arrears of more than four months, you can attempt to regain possession of your property with four weeks’ notice.
What to do when a tenant is not paying rent
If you do find yourself with tenants who are not paying the rent, or not paying it on time, these are the steps you should take…
1. Keep a record of all payments and missed payments
Be sure to keep a record of all your tenant’s payments and any they have missed.
Having written evidence is key if you get the point where you start eviction proceedings against your tenant.
2. Establish the problem
Speak to your tenant and try to find out why they have stopped paying the rent.
And remember, the problem could be as simple as forgetfulness or perhaps a failure to set up a standing order correctly.
So, with that in mind, be nice when you contact your tenant, preferably by phone, to discuss what's happened.
If you can't reach the tenant by phone, try a text or WhatsApp message and politely request they call you.
If you are able to reach them, discuss the problem calmly and try to be sympathetic to the reasons why your tenant is not paying the rent owed.
3. Suggest a way forward
Once you have clarity on the reasons why your tenant is not paying their rent on time, suggest a way forward.
This could be recommending a payment plan so your tenant can pay off any arrears over a period of time.
Or you could suggest they appoint a guarantor if they don't have one already.
However, be clear that further action could be taken if your tenant falls behind with their rent again and put everything discussed verbally in writing.
If you have still been unable to contact your tenant, you should write to them...
4. A letter for tenants not paying rent on time
If your tenant is at least one month behind with their rent and you have been unable to contact them in person to discuss the issue, it's time to write them a letter.
This should either be posted First Class or hand delivered to the property.
Make clear to the tenant that they are in arrears, state the amount owed and insist that the amount is payable immediately to avoid further action being taken.
5. Write again if your tenant still doesn't respond
If 14 days passes and you have still had no contact with your tenant and they have not settled their arrears, you should write again - both to the tenant and their guarantor if they have one.
Outline once more the amount owed and if your tenant is now at least two months in arrears, let them know that the Housing Act 1988 allows you to take legal action to regain possession of your property unless the amount is paid immediately.
6. Confirm you are taking legal action
If your tenant has still not cleared their arrears and 21 days have passed, you should write a final time to confirm you will be taking legal action if the outstanding rent is not paid immediately.
7. Serve a section 8 eviction notice
You should follow official eviction procedures to a tee to avoid problems further down the legal process when regaining possession of your property.
A section 8 notice should be served on your tenant, informing them they have 14 days to pay their outstanding rent or be taken to court.
As part of serving your tenant notice, you should clearly specify which term of the tenancy agreement they have broken, in this case failing to pay rent in full and on time, and stipulate a notice period for them to vacate the property.
If your tenant’s fixed term agreement is coming to an end, you may be able to serve a section 21 notice rather than a section 8.
There are pros and cons to both, however – especially when a tenant is in rent arrears.
A section 21 notice can be a smoother process, but you won’t be able to make a claim for unpaid rent unless you serve a section 8.
However, you may be able to use a section 21 notice and then make a separate claim for the debt later.
If the tenant has the means to pay the rent arrears, or they have a guarantor, a section 8 process may be the best approach.
But if they have no means to pay and no guarantor, but their fixed term is ending, a section 21 process may see you regain possession of your property quicker – albeit without immediately recovering the rent owed.
8. Apply for a possession order
Should your tenant not leave the property by the end of the section 8 notice period, you will have to apply to the court for a possession order.
An accelerated possession order, one not usually requiring a court date, can often be used if you are not making a claim for your tenant's rent arrears.
But if you are claiming for the rent owed, you should use a standard possession order procedure.
This is where the costs come in for landlords in this scenario, with a standard possession order claim costing between £325 and £355.
If your tenant doesn't not challenge the possession application within 14 days, a judge will usually make an order (without a court hearing under accelerated possession) and set a date for a hearing.
At the hearing, the judge could make any number of decisions, including:
- Dismissing the case
- Adjourning the hearing for a future date
- Make an order
If the judge makes an order for possession, your tenant will be told to leave the property by a certain date.
A suspended order for possession means your tenants can stay in the property but only if they abide by the conditions set out in the order.
A money order means your tenant must pay you a set amount or face further action.
9. Ask for a warrant for possession
If your tenant does not leave the property by the date set in the possession order, you can ask the court for a warrant of possession.
This means a bailiff can evict the tenant if they do not leave by the date set in the warrant.
The Debt Respite (Breathing Space) scheme
The government’s ‘Breathing Space’ scheme is a new concept that aims to give certain people in debt a period of legal protection from creditors.
Landlords need to be aware of this legislation, which applies to those in rent arrears.
Tenants in arrears can only claim ‘Breathing Space’ if authorised by a Financial Conduct Authority (FCA) debt advice provider or a local authority.
The ‘Breathing Space’ period lasts for up to 60 days, during which time you must stop all action related to your tenant’s rent arrears.
More information on the ‘Breathing Space’ scheme is available here.
In summary: Always follow correct eviction procedures
No matter how frustrating a tenant not paying rent can be, it's important to correctly follow all procedures when dealing with the problem.
You should not harass your tenant or stop any services to the property such as electricity or gas and certainly should not use aggressive tactics to either evict them or claim the money owed in rent arrears.
You should also give the correct notice periods when starting eviction proceedings.
To find out more about how using a letting agent’s management service could help you find the right tenants for your rental property, contact your local CJ Hole branch who will be happy to help.