Late or unpaid rent is an issue most landlords face at one time or another, but knowing how to handle the problem, or relying on a letting agent to deal with it, can prevent the situation from escalating.
The COVID-19 pandemic impacted many people’s personal circumstances. Our advice to any landlord who finds themselves in this situation is always to open a dialogue with their tenants to reach a solution rather than take tough action in the first instance.
Clan Gordon manages more than 500 properties across Edinburgh for landlords, and we always recommend a measured approach. Ensure you follow legal guidelines and have all the information about the specific situation.
When rent is late, it’s worth considering the following strategies:
Before you do anything, make contact with your tenant and ask why the payment is late. It could have been an oversight, they could have switched bank accounts, or it could be a simple administrative error. Always ask the question first before assuming non-payment is deliberate.
If payment is late for a genuine reason such as redundancy or sickness, try to agree on a plan that considers the tenant’s new circumstances. Perhaps the rent can be reduced for a short period until the situation changes, with the shortfall repaid over several months. Always try to reach a realistic compromise that is workable.
Frequent late payments are sometimes caused by rent being due before tenants’ salaries are paid, so consider changing the date if this is the case. If this impacts your own mortgage payments, ask your provider if it’s possible to switch the date. Most buy-to-let mortgage providers will oblige moving dates within the same month.
Encourage tenants to make their monthly payments by standing order, so there’s no possibility of forgotten or late payments. Explain how easy it is to set up and that they have complete control over the payments at all times.
Landlords can protect themselves against late payments that have the potential to impact their own mortgages by putting in place contingency plans such as asking for a guarantor. This is common for student tenancies.
Special landlord insurance with non-payment protection is also an option, although it can add to the cost of the premium.
Most tenants pay their rent on time. Non-payment is actually quite rare, and landlords who maintain good relationships and communicate well are unlikely to face problems.
Responding promptly to issues such as repairs and maintenance will make late rent payments less likely to occur, and if problems arise, it will be easier to come to an agreement because a good relationship is already in place.
Tenants will also be more likely to open up about problems early, so any financial issues can be managed effectively, so they don’t get out of hand.
When things go wrong, letting can quickly become a pain. At Clan Gordon, our professional property managers take care of all your obligations, so you can relax.
We’ve helped hundreds of Edinburgh property owners so letting never becomes a burden. Schedule a call today and find out how Edinburgh’s highest-rated letting agent can help you.