Failure of tenants to pay rent on time, or at all, is the biggest single headache for property owners. If everything fails and you need to evict your tenants, this can take 5-6 months so in my view it is worth taking a tough line early on. If you have a buy-to-let mortgage, this delay and non-payment is clearly a very serious matter. All the large estate agents will advise landlords to start proceedings once 2 months’ rent is in arrears, ie. 32 days after the first rent is due. However, our approach is to be all over it immediately. If you don’t chase tenants actively they may assume that you are not worried about payment dates, that there is flexibility in the due date or that you don’t actually need the money. So here’s the Homes by Sophie process:
• The day rent is due – call the tenant and check they are making the transfer and call daily thereafter. You will be able to get a feel for what is going on – has the tenant just forgotten, have they lost their job, has the tenant’s bank failed to process the standing order?
• 7 days after rent is due – Start to create an audit trail at this stage in case the situation gets legal. There is no need to involve a solicitor yet, simply write to say that the situation is unacceptable, regardless of any excuses the tenant may have provided. Do use email but also send the letter by recorded mail and keep your proof of postage
• 14 days after rent is due – write a similar letter with stronger language
• 21 days after rent is due – write a similar letter and warn the tenant that you will be instructing your solicitor if payment is not received immediately
• 28 days after rent is due – unfortunately, if you’ve got to this stage and still not received your rent, you must now call in your solicitor.
Even the most stringent tenant references are no guarantee that rent will be paid, so it is definitely worth taking a business-like attitude to ensuring your income is protected.
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