How to Collect Rent and Chase Rent Arrears

12 September 2021

Rent Payment

Most modern tenancies are Assured Shorthold Tenancies and involve a regular payment of rent usually monthly, weekly or fortnightly. The tenancy agreement should clearly state how the tenant must pay the rent. Ideally it should be paid by standing order - easily setup using a standing order mandate - which eliminates waiting for bank transfers or cheques that never arrive.

The landlords should regularly check their bank account to ensure the rent payment has been made on time. Failure to do this can increase the likelihood of problems further down the line.

Rent Statement

It is best practice to have a rent statement available to the tenant so they can see how much rent is due, when it is due and a history of payments already made.

Rent Arrears

Rent arrears can arise for a number of reasons and landlords should try to deal sympathetically with tenants in arrears because the situation might be out of their control.

As soon as a rent payment is late the landlord should take immediate action and send the tenant a polite reminder.

After a polite reminder, the tenant will often remedy the situation quickly. If they do not, the landlord should follow up with a second, polite but firm, reminder.

If the tenant still does not pay, it is a good idea to find out why not. For instance, it's possible that the bank has not made the standing order payment, or the tenant has gone temporarily overdrawn or they have recently changed bank accounts.

The landlord should work with the tenant to arrange prompt settlement. If the tenant is in debt, the landlord and tenant may be able to work out a mutually agreeable payment plan.

Regaining Possession

If the tenant gets seriously overdue with the rent, and the tenancy is an Assured Shorthold Tenancy, the landlord should take steps to regain possession of the property.

The first step is that the landlord should serve the tenant with a Section 8 Notice seeking possession of the property. This notice includes the relevant grounds, or reasons, for possession which are detailed in Schedule 2 to the Housing Act 1988. There are 17 different grounds covering things like rent arrears, breaches of the tenancy agreement, neglect and repossession by the mortgagee.

The next step is to try and recover the overdue rent through legal channels such as the Small Claims Court, a collection agent or engaging the services of a solicitor.

Categories: Residential Lettings Best Practice