As the landlord of a property, you have a right to expect that rent is paid in full and on time by your tenants.
Most private landlords ask that tenants pay each month's rent in advance and this is often specified in the tenancy agreement. You should decide how you want to collect rent from your tenants. Would you prefer to collect the rent in person or have the tenants set up a direct payment to your bank account?
If you decide to collect rent in person, try to set up a regular date and time to do this. Be aware that this date may not always suit your tenants and that you may need to be flexible. As with any other time you call to the property, you should give your tenants at least 24 hours notice of your intention to visit.
Make sure that you keep accurate records of any rental payments made. If your tenants have set up a standing order or direct debit, ask them to label the payment so that it will show up under their names on your statement. If the tenants have not labelled the payment, you can ask your bank to do this.
Even if your tenants pay their rent directly into your bank account, you must give them a rent book and should update this at regular intervals to show that payments have been made.
Universal Credit and Housing Benefit
Anyone with a liability to pay rent can apply for social security benefits to help with these payments. A term in your contract which forbids a tenant from exercising this right is likely to be unlawful and unenforceable.
If your tenants apply for Universal Credit or Housing Benefit to help with rent payments, you will have to confirm the tenancy for the agency processing the claim. You can do this by
- providing a letter and a copy of the tenancy agreement to a tenant applying for Universal Credit
- completing a section of the application form for a tenant applying for Housing Benefit
Benefit help with rates
Your tenant can also get benefit help with rates.
If the tenant is applying for Housing Benefit, they need to complete the form to show that they have to pay rates or that their rent includes an amount for rates.
If the tenant is getting Universal Credit, they have to make a separate application for help with rates. This is done online via NIDirect. You have to verify the tenant's claim and do this by creating your own account on the rate rebate system.
Shortfalls in rent
Tenants who receive benefits to help with the costs of their rent may not always receive enough benefit to cover the full contractual rent.
If this is the case, you should ask your tenant to complete a Discretionary Housing Payment application. A Discretionary Housing Payment is a top up payment available to private tenants to assist them further with their housing costs. These payments are short term measures and cannot be relied on. Not everyone who applies for one of these payments will be successful.
If your tenant is experiencing a significant shortfall you have several options:
- consider reducing the rent to a level which the tenant can afford and which allows you to meet your own financial obligations on the property
- ask the tenant to apply for a Discretionary Housing Payment
- begin eviction proceedings against the tenant for rent arrears.
Before you decide to evict a tenant, you should seriously consider whether it is worth losing a sitting tenant, particularly if the tenant has been a good and reliable tenant. It may be a better idea to decrease the rent to an affordable level, if you are able to do so. Another tenant may not take such good care of the property and other tenants who also rely on housing benefit may experience the same shortfall.
Non payment of rent
One of the very basic rights that you have is an entitlement to receive your rent in full and on time. This is specified in most tenancy agreements and in your rent book. If your tenants fall into rent arrears, you are entitled to begin eviction proceedings against them as they are in breach of their contract.
Before proceeding to expensive court action you should contact your tenants to find out if there is a justifiable reason for the rent arrears. Rent arrears are not always the fault of the tenants, but could be due to:
- loss of employment or reduction in hours
- problems processing housing benefit or other benefit claims
- recent unforeseen expenditure, e.g. education or healthcare costs.
Where a tenant has lost his or her job and must apply for housing benefit, he or she may be able to have their full monthly rent paid for a 13 week period if it can be proven that the tenant could afford the rent when the tenancy agreement was signed and that the household hasn't been in receipt of housing benefit in the previous 52 week period. If a member of the tenant's family, who was a part of the tenant's household dies the tenant may also be entitled to have his full rent paid by housing benefit for up to one year.
If it is practical for you to do so, you should try to negotiate with your tenant to come to an agreeable repayment plan. When deciding how to deal with rent arrears, you should always balance up whether it's worth losing a good tenant and potentially risking a couple of void months while your property is marketed.
If you do decide to evict the tenant, you must follow the correct legal procedure.