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.
All private tenants have a legal right to apply for housing benefit and you cannot refuse to allow an existing tenant to pay the rent with housing benefit.
If your tenants need to make a claim for housing benefit, you, or your agent, will have to complete a section of the housing benefit application form. The form will ask for lots of information including:
- when the tenancy started and whether there is a tenancy agreement and rent book
- your relationship with the tenant
- details of rent and rates charged on the property
- services included in the rent
- the type of accommodation
- your bank details.
You must fill this form in accurately. If your tenant is liable for rates, you must declare this on the form and specify how much of the contractual rent is intended for rate payments. The Housing Executive will pay the rates directly to Land & Property Services.
Shortfalls in rent
Tenants who receive housing benefit 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.
Recent reductions in the amount of housing benefit paid for private lettings throughout the UK may mean that landlords will have to reassess the rent levels which they have set for their properties.
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.