Private landlords here in the UK perform a vital service, offering properties for rent in a market where demand often outstrips supply. As a private landlord, you’re a small business owner and this means that there are plenty of jobs involved in running your small business. Nowadays, it’s not just a matter of signing a tenancy agreement and handing over the keys, as a landlord you have responsibilities but, don’t forget, you also have rights. While you’re probably well aware of the responsibilities you have towards your tenants, you may feel that your rights are often overlooked, especially when it comes to collecting rents.
Overdue rents can present a landlord with an ongoing problem and it may often seem that you spend a disproportionate amount of time trying to collect the monies due to you from tenants. It’s vital that your tenants pay their rent on time because you also have bills to pay and when a tenant does fall behind with the rent, they may find it difficult to pay the rent next time it’s due. Here are some tips you can use to try to ensure that your tenants don’t fall behind with the rent.
First of all, you and your tenant need to agree on when a rent payment would be considered to be late or overdue. The best way of doing so is to make it clear in the rental agreement that any rent not paid by a certain date would be considered late. This is the specific date with no extensions or exceptions.
If a tenant pays the rent late, you can charge a late fee – this is a great way of discouraging tenants from getting behind with payments on a regular basis. How much to charge is up to you and will depend, to some extent, on the total amount of rent to be paid. The fact that you charge a fee for late payment of rent and the amount of the late fee should be clearly laid out in the tenancy agreement. The tenant will sign this agreement which also means that they accept that they will have to pay the late fee if they do not pay the rent on time.
If a tenant is a persistent late payer then you could consider evicting them. However, the process can take some time and you would need to go to court in order to do this. Some tenants in the UK tend to disappear (fly by night) owing several months’ rent payments which is a nightmare scenario for any landlord. In this case, your property will have sat empty for some time, not bringing in any income for you and chances are you’ll need to spend some money on the property in order to make it fit to let again.
If a tenant does leave owing you money and without leaving a forwarding address, then you could consider using a collecting agency to recover the debt for you. It may seem that the amount owed to you is not worth the bother of hiring a professional debt recovery service but some of these collecting agencies operate on a no-win, no-fee basis which offers you a certain amount of security when trying to recover the debt.
ACM, established in March 2000, continues to be rated as a credit worthy business by leading providers of commercial credit information and is a member of the International Association of Credit and Collection Professionals.