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What can landlords do about late rent payments?

Property Management

Property Brokers 19 Sep 2017

Blog-28-What-can-landlords-do-about-late-rent-payments.png Does one of your tenants have a history of late rent payments? Here are the steps you need to take:

Read more: Risky Tenants Guide

Day 1

  • Send a reminder by all available forms of communication

Sometimes, tenants can just forget to pay the rent, or there could be a problem with their bank transfer, or one of many other problems. Rather than immediately jumping to the nuclear option, simply send a text, call or email them as a reminder that they need to pay the rent, and how much.

 

Day 2

  • Send another reminder

Give them 24 hours to respond, and if they don’t, send another reminder. This is the stage at which you are trying to resolve the situation between just the two of you without involving the Tenancy Tribunal. This is known as a self-resolution.

If you get a response from the tenant, or better yet a resolution, make sure you get it in writing. If the tenant has paid the rent by this stage, the issue is resolved and you can go on with your day.

 

Day 3

  • Send the 14 day notice if you haven’t heard from them

This is the day that you escalate with a 14-day Notice to Remedy. You can find a template here. This form essentially outlines the issue and the required remedy to the tenant, and formalises the start of the process you’ll need to follow to get mediation from the Tenancy Tribunal if necessary.

Note that the 14-day notice does not include the day that you send it to the client.

Send this form physically as well as via email. You’ll need to give some ‘service days’ to give the postal service and the tenant adequate time to have received the form. You’ll need to add four days to the 14-day deadline for sending by mail, two days if you leave it at the property, one day if sent after 5pm by email, and none at all if you hand it over personally.

Note that the 14-day notice does not include the day that you send it to the client.

 

Day 10–12

  • Make an application to the Tenancy Tribunal if you haven’t heard from them

While you are waiting for the situation to be resolved or for the 14-day notice to expire, this is a good opportunity to apply to the Tenancy Tribunal. You’ll still need to wait for the full 14 days to pass before they can take action, but applications can take quite a long time to be processed. This saves you from having to wait and possibly missing out on income due to further rental arrears.

You may have reached a personal resolution at this point as well. If that’s the case, get it in writing and withdraw your application to the Tenancy Tribunal.

Read more: The 3 secrets of finding ideal tenants for your rental property

Day 18–22

  • The 14 day notice has now expired (depending on the method used to send the notice)

By this point, the 14 days will have expired. If no resolution has been reached, the Tenancy Tribunal will be able to bring you and your tenant into mediation. This meeting should help you come to a resolution that you can both agree to.

You’ll need to bring all of the paperwork you’ve gathered so far. That includes:

  • Proof of initial reminders to tenants
  • The 14-day notice to remedy (physical and email copies, make sure you include the date and time on the email version).
  • A copy of the signed tenancy agreement.
  • A summary of all rental payments.

The resolution you reach will, hopefully, result in your rental arrears being paid in full back to you. If no agreement can be reached, however, you may need to go to a Tenancy Tribunal hearing instead.

If no agreement can be reached, however, you may need to go to a Tenancy Tribunal hearing instead.

This is similar to the mediation, in that you explain your position and provide evidence of your actions up to this point. However, unlike the mediation, the court can demand that certain actions be taken: ideally including your tenant paying their rental arrears.

 

Day 22+

By this point, your tenant will have been in rental arrears for more than 21 days. This allows you to apply for eviction from the Tenancy Tribunal, if you so wish. You don’t have to, but at this point your tenant may have proven to be more of a problem than they are worth.

Overdue rent can end up creating a long, complicated and stressful process.

 

Stop worrying about getting the wrong tenants. Arm yourself with the knowledge you need with our free ebook below.

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