How to Handle Late Rent Payments as a Landlord in East London

East London rental properties have seen a rise in rent – unfortunately, rent arrears have risen as well. Make sure you know how to deal with late rent payment, should it happen to you.

Average monthly rents in Barking rose by 8.5% in the past year, according to ONS figures. In Redbridge, detached properties saw an average rent increase of 8.7% while the monthly rent on flats and maisonettes went up by 9.4%. Then there are the usual reasons for a late rent payment as well, from lost jobs to forgetfulness. So, whether you rent out a Victorian house in Gants Hill or Leytonstone or a new build flat in Newbury Park, read on.

How long can a tenant not pay rent before eviction, and is that the only solution? We explain the timelines and how to evict a tenant for not paying rent, if it comes to it.

Understanding late rent payment

Is there a genuine error, or have the tenants stopped paying rent? Many landlords give a grace period on late rent payments of 2-5 days as it may appear without incident.

First, phone or send a late rent reminder text message (samples are available online) to find out what’s going on. Always deal with a tenant’s late rent payment politely, to avoid souring relations with a reliable tenant. But if they don’t respond, start the formal process.

Do’s and don’ts when addressing late rent payment

Follow the normal rules of the tenancy agreement. Crossing these lines can interrupt the eviction process and you may have to pay damages in court. In short, don’t risk it.

Do

• Approach things calmly
• Keep things amicable
• Document all contact and responses

Don’t

• Threaten the tenants
• Act aggressively
• Enter the property without notice
• Change the locks
• Disconnect the utilities

Want to know more? If informal steps haven’t resolved the arrears, the next stage is formal action — read our guide to what to do when a tenant is not paying rent and understand how evicting a tenant in East London works under current legislation.

Late rent payment: Actions to take in order

Here’s what happens if a tenant does not pay rent. We explain what to do, how to give notice for late rent, and when you can evict a tenant.

1 Contact them formally

Send your tenants a formal letter asking for the unpaid rent in full by a certain date. Tell them that rent arrears can lead to court action, and that once two months’ rent is unpaid you can apply to the court to take possession of the rental property. They may be able to contact Universal Credit if applicable, or you can discuss a repayment plan if you choose to.

2 Check in with your insurer

Your landlord insurance policy may provide cover for unpaid rent, so ask them how to make a claim. Speak to your tenancy deposit protection scheme to find out how to claim any outstanding money, too.

3 Send a second formal letter

14 days after the rent was due, send a second letter advising that you’ll have to take further action if the rent remains unpaid.

4 Talk to their guarantor (if applicable)

If your tenant has a guarantor, contact them at this point, explaining that the tenant has fallen into rent arrears.

5 Send them a final warning letter

Once 21 days have elapsed, if the rent is still late, send your tenant and guarantor one more letter before taking legal action. State that they will be served with a notice to leave the property if they don’t pay the rent.

6 Begin the eviction process

If your tenants are two months in arrears, you have the legal right to seek possession under the Housing Act 1988. There are two types of eviction notice, a Section 8 notice or Section 21 notice.

Section 21 Notice

You can issue a ‘no fault notice’, formally known as a Section 21 notice, to evict your tenants at the end of the contact. This may be easier if the fixed term is due to end anyway.

Section 8 Notice

Serving a Section 8 notice is an option for certain reasons including anti-social behaviour, breaking the terms of the tenancy agreement, and not paying the rent. Provide the reason, giving between two weeks’ notice and two months’ notice according to the rules.

Want to find out more? Better tenant screening at the outset can reduce the risk of arrears altogether — find out how long tenant referencing takes and how rent guarantee insurance for landlords can protect your income if a tenant falls behind.

7 Go to court (if necessary)

Some tenants won’t pay the rent or leave according to the eviction notice. Apply to the court, who can instruct the tenant to pay the rent arrears, set conditions for the tenants to remain, or order them to leave. Tenants can also be ordered to pay your court fees and legal costs.

And Finally…

You’ve got to deal with late rent payment the right way, but remember that expert advice is always on hand. If you’re a landlord in Plaistow, Barking, East Ham or Seven Kings, talk to our knowledgeable team at Highcastle Estates.