With Christmas and New Year now out of the way and seemingly just a fading memory, its back to normality safe in the knowledge that you won’t be tripping over decorations for another year. However, for some the Christmas hangover continues…
With this in mind, I thought this week would be a perfect time to discuss something that no one likes, rent arrears. Historically, January is the busiest month for chasing rent arrears. This isn’t a local problem but a national one. In January the total percentage of tenants in rent arrears rises from 8% to 12%. The first thing that must be said about rent arrears is that the best way to prevent them, is to avoid them before the tenant has even moved in. Ensure that your potential tenant is fully referenced to include a landlord reference, work reference and credit check. This will give you a better understanding of the quality of the person you may be about to give your keys to!
It is also important to plan ahead, if your tenant doesn’t pay, can you afford to pay the mortgage? We always recommend that you have a contingency of 3 months payments, should the worst happen. Aside from this, considering taking out a rent protection policy that covers any non-payment of rent as well as any legal costs that should arise is worthwhile to cover you should the worst happen. If rent arrears do occur and you manage your own property, it is important that you act quickly and contact the tenant. Talking with the tenant to understand why they are unable to pay the rent is key. An open discussion with them often builds respect and understanding, and allows for a solution to be worked out. This could be a payment plan or an agreed later payment date, however, it is worth saying that this should not be allowed to become a normal occurrence. In the worst case scenario, where rent is continually late or often in arrears, consider ending the tenancy via a section 21 or section 8 notice. If you have any queries on this, it is wise to seek professional advice.
At Chelton Brown we are proud to have a fantastic in-house and dedicated Accounts Team, as a company our arrears are currently at 3%, a far cry from the national average. If you have any questions about dealing with rent arrears, don’t hesitate to contact myself or one of the team.