How landlords can work to recover rent arrears
With many private tenants in the UK struggling to meet their rental commitments, landlords may be facing an uphill battle to recover rent, and as result lose out on the yields they would normally gain from their portfolio of rental properties.
Here are just a few ways that landlords can act to recover rent if their tenants have gone into arrears.
If landlords feel that court action will prompt a tenant into paying the rent they owe, then they can lodge a claim with the court to enact debt recovery proceedings. If no defence is made to the claim, then a judgment can be obtained for outstanding rent, which can be enforced under the same conditions as any creditor.
If a situation with a tenant has escalated to the point where more decisive action needs to be taken, while allowing the tenants to remain in the property, then serving a Statutory Demand upon the tenant could be an option.
A Statutory Demand gives tenants 21 days in which to repay rent arrears, and if this deadline is not met then landlords are entitled to present a Bankruptcy Petition or Winding Up Petition to begin insolvency proceedings.
A distraint allows landlords to use the services of a bailiff to recover tenant’s outstanding rent by identifying goods at the leased property that can be used to meet the cost of the outstanding rent. If rent arrears remain unpaid then the bailiff will move to sell the items in question.
This course of action can be put into place provided that the lease on the property has not been surrendered or forfeited.
Protecting Landlord’s position from the outset
A number of measures can be put into place to provide landlords with advance protection against tenants defaulting on their rent payments.
This includes outlining the requirement for tenants to have a guarantor in their lease, with landlords able to pursue the guarantor to recover any rent owing.
Landlords can also consider obtaining a large rent deposit, usually equivalent to one year's rent, which can be used to address any periods where the tenant has failed to make rent payments.
If you are a landlord seeking advice on recovering rent arrears, then insolvency practitioners london could provide the support you need.
If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143.