My tenant isn’t paying rent – what can I do?

The media has largely focused on the impact of the cost of living increase on tenants; often with significance being placed on the abolition of non-fault eviction as the solution to the challenges tenants face (and to remedy the country’s housing crisis).

The financial pressures are not however only being felt by renters. Landlords are facing a steep increase in costs, perhaps most notably as a result of interest rates reaching a 15-year high and the resultant effect on mortgage payments. Energy bills have continued to increase, which is a considerable issue for bills-included tenancy agreements. There is also the fact that many Landlords may soon incur the additional expense of ensuring that their properties meet the minimum rating of C when the new EPC Regulations come in next year (2025). Accordingly, many tenancies have seen rent payments having been uplifted in recent months, in an attempt to combat Landlords’ losses.

There are systems in place to help Landlords and their Tenants to manage to the cost of living crisis. We recommend that Landlords check their eligibility, or liaise with their Tenants to check their eligibility, to utilise the Warm House Discount Scheme, the Cold Weather and Winter Fuel payments and Cost of Living Payments.

All in all, it is fair to say that Landlords and Tenants are respectively feeling the pinch of rising costs. In a growing number of cases, the increases for Tenants are overwhelming and their monthly income no longer covers their outgoings (despite the above-mentioned schemes in place to assist). This can result in Tenants falling behind in their rental payments which has a knock on effect on Landlords.

We regularly assist clients in recovering possession of their property’s. The route to gaining possession can be varied but a common result is that a Landlord can be left trying to recover unpaid rent and costs of repairs from a tenant that has no available funds or that has left the property without providing a forwarding address. A former tenant can sometimes be traced to a new address, but this can take months or even years.

To mitigate the loss of unpaid rent we strongly encourage our clients to ensure the following items are in place:

1. A deposit correctly secured with a Deposit Protection Scheme;
2. To only let a property to a Tenant with a Guarantor (that has been properly vetted) in place. A Guarantor can provide financial security for a Landlord in the event that the Tenant stops paying rent and cannot (or will not) repay the outstanding sums. Further, if Court proceedings become necessary a Landlord could be in a position to recover legal costs but from a Tenant suffering financially or having left the property without providing a forwarding address. A Guarantor provides Landlords with a reasonable degree of security and a realistic way to recover sums owed to them;
3. Taking proactive steps to engage with Tenants if rent is received late, and monitoring the same to prevent rent arrears escalating; and
4. To include a provision in the tenancy agreement for a forwarding address (this may assist in contacting the tenant once they have left and securing a Judgment against the tenant if necessary).

Whilst these suggestions cannot provide total security, they can go a long way in protecting against significant financial loss.

How can Ellis Jones help you?

Ellis Jones have a specialised Dispute Resolution team available to assist both Landlords and Tenants. In particular, our team can assist Landlords prior to entering into tenancy agreements (or prior to renewing them) by advising on key protections to minimise risk further down the line; but also Landlords facing a non-paying tenant by advising and representing during possession and arrears recovery proceedings, both against tenants, and guarantors. Should you wish to speak to one of our experts, please do not hesitate to contact our specialist Dispute Resolution team on 01202 525333 or emma.bowditch@ellisjones.co.uk.