Rent is late because of Christmas. What do I do?

Question

Answer

The supermarkets are starting to fill up with advent calendars and mince pies, the festive adverts are starting to creep on to the tv, and there’s no avoiding it – Christmas is on the way.

Whilst it’s billed as the most wonderful time of the year, the financial pressure that Christmas brings is undeniable, and even the most financially secure tenant may find themselves feeling a little stretched in the run up to festive break. However, there is no excuse for prioritising presents and parties over rent payments, so it is understandable that you are feeling a little nervous.

But how exactly should you deal with such a situation?

Have a frank and open discussion

Open lines of communication with your tenant are vital, and in a situation like this the best thing you can do is keep correspondence gentle and supportive - it’s better to be working with your tenant than against them, it may be that there is more to the situation that meets the eye. Your tenant may be using stocking up on stocking fillers as an excuse, but this could be masking a deeper issue, something that you need to work through as a team if you hope to rectify the situation.

If you can, arrange to meet with your tenant somewhere neutral to discuss the issue, and have a chat about what’s going on with regards to their payment blip. They may admit that there are more issues at play in force, or own up that it really is just a situation with poor budgeting.

Once you have a clear picture, you can decide on a plan moving forward.

Formalise any communications

It sounds as if your tenant has notified you of the late payment verbally, but it is still important to make sure that you send a polite letter requesting payment as soon as you can, and possibly another letter a week or two later. This helps you build a paper trail so should the matter ever need to be escalated (hopefully not, but consider the worst-case scenario) you have records that you did notify your tenant of the requirement to make a payment.

Similarly, any meetings you have with the tenant to discuss the situation be followed up with an email or letter outlining what has been discussed and any plans that you agreed.

Don’t overdo it

Whilst it is important to formalise meetings, and ensure that you are in contact with your tenant about this issue, don’t forget that rent or not, your tenant still has a contract to live in the property, and has a right to quiet enjoyment. If you make too much contact, in the form of visits, emails, texts, phone calls or letters, you could be deemed to be harassing the tenant. Proceed with caution!

Has your tenant said they will be paying late, or not at all?

Your conversations should help ascertain this, but it is important to understand exactly the situation that your tenant is outlining – are they suggesting that they are defaulting on the rent for this month entirely, or simply that it will be a little late? If the rent is likely to be a couple of weeks late, it may be worth chalking this up to experience and having a chat with your tenant about how you’ll let it slide this time, but that moving forwards there is a set date for payment and remind them of this.

If there is no rent forthcoming at all, you could consider putting a payment plan into place for your tenant to commit to repaying the unpaid rent over a period of X-amount of months. Do bear in mind though that this must be manageable for your tenant to keep to, otherwise you risk throwing their budget out again.

Late payment charge

You could decide to levy a late payment charge, but this does seem a little counter-productive. If your tenant is already struggling to make ends meet (for whatever reason) hitting them with another bill makes it even less likely that you’ll see the rent that you are owed.

Don’t hold your tenant ‘against their will’

A tenant who is unable to pay their rent is going to cause you (and them) nothing but heartache – if they have a financial issue that may have changed since they took on the tenancy, this could be a situation you are facing every month.

If your tenant admits that their finances are not looking too healthy and that they are concerned that they are not likely to be able to meet their rent on a monthly basis, you could question if it is wise for them to remain in the property. They are unlikely to want to go through the stress of having to scrape together the rent on a monthly basis, and you certainly don’t want the arrears to build up either. If this is the case, you could consider offering your tenant the opportunity to sign a deed of surrender. You can get more information about how to use a deed of surrender here: https://www.urban.co.uk/landlord-university/advice...

Worst case scenario

If worst comes to worst, and your tenant continues to be Grinch-like with their rent payments, it’s possible that you will be left with no option but to put them on your naughty list and seek possession of your property.

You can choose to issue either a section 8 notice, or a section 21 notice in order to regain possession.

For more information about the processes you need to follow to issue either a section 8 or section 21 notice, a full breakdown is available here: https://www.urban.co.uk/landlord-university/questi...