As the property market continues to evolve, one constant concern remains at the forefront of every landlord's mind: rent arrears.
I have just delivered my first of this years training sessions for the NRLA (National Residential Landlords Association) on "Managing Rent Arrears,"
In the training I delve into the strategies landlords can employ to mitigate rent arrears and foster positive tenant-landlord relationships.
The adage "prevention is better than cure" rings especially true in the realm of rent arrears.
Landlords can significantly reduce the risk of arrears by implementing robust policies and procedures from the outset. One crucial component is having a detailed rent arrears policy in place, outlining clear expectations and consequences for late or missed payments. Additionally, thorough tenant referencing, including financial checks and previous rental history, can help identify potential red flags before signing a tenancy agreement. The key point to make here, it that seeking a reference from the immediate landlord may not provide the best picture of a current tenants performance, let’s face it, a landlord looking to rid themselves of a problem tenant is hardly going to regale you with a list of woes, instead they will paint the tenant as an angel to ensure they are rid of the problem. To counter this, where possible try to get a reference from the landord prior to the current accommodation, this landlord has nothing to lose by telling you the truth warts and all…
When a tenant falls into arrears, the initial approach taken by the landlord can set the tone for how the situation unfolds. It's essential for landlords to maintain open lines of communication and approach the issue with empathy and understanding. Rather than immediately resorting to legal action or eviction proceedings, landlords should first seek to understand the underlying reasons for the arrears and work collaboratively with the tenant to find a solution.
My advice here, make a call as soon as the tenant is a day late or a penny short.
Start your phone call with “Hi, I see you haven’t paid your rent. Is everything ok?”
This will set a more open and supportive tone. Please don’t open the call with “Where’s my money” or “You haven’t paid your rent I’m evicting you”
As I can guarantee this will not end with a positive outcome.
In many cases, tenants facing rent arrears may be experiencing financial hardship due to unforeseen circumstances such as job loss, illness, or changes in personal circumstances.
As landlords, we have a responsibility to support our tenants during difficult times and help them access available resources.
Remember the private rental sector is governed by Consumer Protection regulations for a reason, your tenant is your customer.
Support may include providing information on grants, financial assistance available via local councils, or local charities that offer support for rent payments.
By taking a proactive approach and offering assistance early on, landlords can demonstrate compassion and foster goodwill with their tenants.
Effective communication is essential throughout the arrears management process. Landlords should maintain regular contact with tenants to monitor their financial situation and provide guidance or support as needed. Establishing a transparent and non-judgmental dialogue can encourage tenants to be forthcoming about any difficulties they may be facing and increase the likelihood of reaching a mutually beneficial resolution.
While landlords strive to resolve rent arrears amicably, there may be instances where legal action becomes necessary.
It's crucial for landlords to familiarise themselves with relevant laws and procedures to ensure compliance and protect their interests.
Seeking legal advice early in the process can help landlords navigate complex legal frameworks and make informed decisions regarding eviction or debt recovery proceedings.
Rent arrears remain a significant concern for landlords, but with proactive measures and a compassionate approach, these challenges can be effectively managed. By implementing robust policies, maintaining open communication, and offering support to tenants in need, landlords can mitigate the risk of arrears and cultivate positive tenant-landlord relationships.
Together, we can navigate these challenges and foster a thriving rental market built on trust, understanding, and cooperation.
Check out the NRLA website for my next ‘Managing rent arrears’ training
https://www.nrla.org.uk//training-academy/finance-and-tax/managing-rent-arrears
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