Collection of unpaid rent arrears
Debt Collection service for Letting Agents and Landlords
In the property rental world, it is an all too common a problem in the modern era. Whether it is wilful non-payment or due financial difficulties, many rental tenants end up owing hundreds or even thousands to their landlord even after eviction.
So what can landlords do?
The first and most important thing a landlord (or Letting Agent) facing this issue can do is to stay calm and not let the problem become emotional. If you are to recover your arrears from an ex tenant, some of whom may be having real money problems, it can be a long process.
The tendency in this situation is to think that to attempt to recover it will be more trouble than it is worth and just write it off to a bad experience. Dependant on the situation, it is always worth pursuing the money that is legally and rightfully yours as a matter of principle if nothing else.
It is never recommended to take Debt Collection action whilst a tenant is still in situ. This can inflame the situation and it is always better to wait till the tenant has vacated the property.
There are a number legal tools that you can utilise where a Tenant becomes a debtor and the priority should be to get them out as soon as possible to limit damage to your bank account.
Before we get into to pursuing the debt, you should ensure that you do everything you can to properly vet prospective tenants through referencing. Do this properly in the first instance and you dramatically reduce the chance you have of running into the problem of rent arrears.
The Eviction Process
If you are already past this point and your existing tenants are the problem, then beginning the process of eviction should be your first task. Tenants who get a long way behind with rent, tend to stop paying completely, so until they are gone from your property, your rental income has effectively stopped.
County Court Judgements (CCJs)
As part of the court order to evict, you may obtain a order for the unpaid rent dependant on which path you take. A CCJ will leave a permanent marker on your tenant’s credit file and will make it very difficult for them to obtain credit until it is removed. Tenants may clear the debt as a result, but it can take a while for this to happen.
Always try and obtain a forwarding address where possible. This will make things much easier when trying to recover unpaid rent but where this is not possible. A trace can be performed to locate them using the latest electronic foot printing systems that a expert collection like Frontline Collections uses.
As mentioned earlier, the best and most effective way to avoid this whole issue is to properly vet and reference potential clients. If not, then a CCJ is probably your best chance of ever seeing any of the arrears, as it can stay in place for over 6 years and keeps tabs on the financial status of the debtor. If their situation improves, then you may end up getting paid.
If you are in this position right now, then why not have a chat with your friendly neighbourhood debt collection agency. They might be able to navigate the tricky these most tricky of waters.
One thing is for sure though, if a tenant refuses to pay – you’re going to have to play the long game if you want to get any sort of result. Common sense needs to prevail in most instances dependant on the debtors circumstances.
If your ex tenant is reliant on state benefits and has no assets then it is reasonable to assume that the best you could hope to achieve is a nominal repayment plan. However, if they have a steady job with a decent level of income then you can expect a far swifter resolution.
Every instance of unpaid rent arrears is judged on its own merit. For a friendly chat and free assessment of your problem, call our New Business Team today for assistance.