What do you do (in the first instance) when rent is not paid.

[Mortitia]

It has been so long since I had this experience that I was slightly flummoxed at to what action to take - for 2 minutes.

New tenant. Very pleasant young male takes on my new studio. Met parents, good refs, good job - have to chase for 2nd months rent - and got it.

That has tarnished his image a bit and I wonder if we will have this every month. Easy to get shot of as he is on a one month contract.

How do the rest of you re-act to missed rent payments?

[Melboy]

A warning letter in the first instance. Pleasant but to the point. I would not let it go for too long before writing either but you would know this.

More than 4 months of late rent payments then.......out they go.

More than 6 weeks of non payment then..................out they go.

Their choice really. I am not a sub office for social services or a registered charity and there are plenty of other people who would be happy to take their place.

[Richlist]

* If its a long standing tenant who is often late with their rent payments.....anything up to 3 weeks..... I do nothing, I just wait for the late payment to arrive. I don't usually let it go beyond 1 month late before setting dedlines for receipt of the late payment. All tenants will have some factor that is not ideal but if the tenant is perfect in every other respect except for paying rent late .....I don't make a fuss, provided the rent is paid, eventually.

* If its a relatively new tenant or a new problem with a long standing tenant who usually pays on time then I phone them ugently and find out what the problem is. In the current economic situation......people are loosing jobs and the self employed are having to wait longer for payment so a small degree of flexibility might be prudent.

* I always take rent guarantee insurance or have a home owning guarantor so ultimately any non payment is never a big issue for me.

[Grampa]

We take a robust view and try to set the tone from day 1. But saying that some tenants are not very organised and need a reminder nearly every month and if that the case we will diarise it to call as soon as one day late.

But we will try to improve the situation by setting up standing orders and or contacting the guarantor which can work well. If you call the guarantor every time late lot of ther time they then start to police the situation for you to stop you contacting them.

But pro-active is the word and getting on top of if from day 1. Also we try to pin down the tenant to a date and or amount if they say they are getting some funds in later on in the week or a few days time. So if they say they are paying £xxxx on friday I call them friday pm to chase up if not recieved and am then like a dog with a bone between my teeth with texts and phone calls. That sets the tone if there is a late payment another time.

If they start advoiding you and wont enter into any dialog the next stage is s21/s8 to get serviousness of the situation over to them..

But saying that when tenants have worked with us keeping us informed and keeping to payment plans it works well. I took over one tenancy where there was 4k in arrears we could have just evicted them but we worked out a payment plan and they are still in the property and the arrears paid off. The landlord is very happy but not with the previous agent.

[Richlist]

I guess that approach is suited / recommended for tenants in receipt of benefits or those in the lower income brackets.

I find with higher earners late payments are virtually non existant and if they are occasionally late then a more flexible approach always works.

I have at least one tenant that is late paying every month and needs chasing. In every other respect thay are perfect. The property is kept in an excellent condition, is very tidy, they are a single person in a larger property so there is little wear & tear, they are paying over market rent, is always accomodating with inspections/ repairs/ access requirements......so, a late payment here and there is more than compensated.

[Dave A]

I talk to tenant straight away, the couple of times it has happened to me have been admin problems with banks. These have always been sorted quickly, following a phone call. Like said before, if they start avoiding your calls etc. then you need to start being more stringent.

Dave

[Grampa]

I guess that approach is suited / recommended for tenants in receipt of benefits or those in the lower income brackets.

Yes your quite right it is the lower income bracket, and the high end we treat in a similar way to yourself but we dont to get many problems with the high end.

I also dont lose any sleep over a few days late as long as it comes in, though some landlords want to evict because the tenant aways pays a couple days late but when I explain how much they will lose in a vacant period before a new tenant is found they change their mind. Your have to be flexible and sometimes make a commercial decision even if you are not happy with the arrangement.

[Carryon Regardless]

A problem with allowing tolerance is that it can become habitual as is it is then perceived as acceptable. In itself not a problem as long as the rent is coming. But if there is an unforeseen situation the T will likely use the money to pay who ever is shouting loudest, if that's not the LL then the arrears grow and the situation can become unrecoverable very easy, then the LL has lost his dosh.

My aim is to have the rents in my bank in time for the outgoing mortgage payments, they're all programmed for the beginning of each month.

T's should pay by SO around the 20th, I allow till the 25th for the banks to do their thing. a penalty of £30 is applied to the account for payments not made by the 25th but I credit that back if payment is made before the end of month, that way I'm not paying the mortgage myself, the rent is.

In truth as I don't want the £30, it is reliable rent payments I'm trying to encourage, if the T is unreliable I put the pressure on with S21 and threats of the boot. Using the S21 boot is a judgement call though as sometimes it's better the devil you know.

[Richlist]

But if there is an unforeseen situation the T will likely use the money to pay who ever is shouting loudest, if that's not the LL then the arrears grow and the situation can become unrecoverable very easy, then the LL has lost his dosh.

= Look of bemusement & astonishment.

It never ceases to amaze me how landlords can fail to acknowledge the opportunity that exists of taking rent guarantee insurance or a home owning guarantor in order to minimise/ virtually eliminate that very situation !

[Grampa]

We have started offering rent guarantee insurance and have found a company that accepts HB tenants as well but you do have to ref the tenant through the same company. The basic ref check costs 8 quid and the policy costs (the landlord) £200 pa

But has anyone on this ever tried to claim off RGI and successfully got it?.

[Mortitia]

OK Richlist so how many times have you claimed and how many times has the insurer paid up?

When RGI first came on the scene it was renowned for not paying out and being difficult to get in contact - I had particular run ins with Homelet in those times.

[Carryon Regardless]

Another thought,

my 11 properties at £200 pa, if T's accepted = total £2,200 pa outlay. That's a lot of lost rent.

I'm not saying it's not a good idea but does bear some consideration. I also try to stay away from additional admin caused by each new organisation I might deal with.

I prefer the G'tor route but I'm finding it more common for seemingly reasonable potential T's to deny that possibility (for what ever reason).

[Richlist]

RGI should be viewed as just another cost of doing business in residential lettings.

Its not beyond any of you to incorporate the costs or even part of them, in your rent charges or admin fees to the tenant.

You can choose not to take the insurance or have a guaranntor and live with the increased risks. I choose to take the insurance......but then I don't moan about unpaid rents. We are all free to make our own choices but at least acknowledge that there is an opportunity of reducing the risk of tenants who don't pay.

Have I claimed ? yes.. Did they pay out ? yes.

the policy costs (the landlord) £200 pa

But at a rent of £600pcm ((£7200pa) a £200 RGI premium......after 20% tax..... represents just 2.2% of your gross income. Its only 1.6% if you are a 40% tax payer. You are probably loosing more than that by not claiming all your allowable expenses that you are entitled to.