Advice needed please: tenant keeps paying rent late

Emanef

Hi all

I'm after some advice for a relative. She is renting her house out, but over the last few months the tenant has been late paying the rent. They have paid it all, but she's had to chase them, and on one occasion it came in a couple of slow installments.

This has financial implications on her, as it means she gets charged if the money she expected to receive isn't in her bank account.

She doesn't want to cause any conflict, but understandably it's not her responsibility if the tenant has financial issues in getting the rent paid on time, but what can she do?

I've had a google and it looks like she could serve notice, but that's not something she wants to do. She knows them through a friend and is happy for them to remain in there as long as they pay on time as they should.

Is there anything she should do other than send them a polite letter asking them to ensure they pay on time? Can she charge them for paying late or anything like that to cover her own costs?

Thanks

pmlindyloo

Emanef wrote: »

Hi all

I'm after some advice for a relative. She is renting her house out, but over the last few months the tenant has been late paying the rent. They have paid it all, but she's had to chase them, and on one occasion it came in a couple of slow installments.

This has financial implications on her, as it means she gets charged if the money she expected to receive isn't in her bank account.

She doesn't want to cause any conflict, but understandably it's not her responsibility if the tenant has financial issues in getting the rent paid on time, but what can she do?

I've had a google and it looks like she could serve notice, but that's not something she wants to do. She knows them through a friend and is happy for them to remain in there as long as they pay on time as they should.

Is there anything she should do other than send them a polite letter asking them to ensure they pay on time? Can she charge them for paying late or anything like that to cover her own costs?

Thanks

Is there anything in the tenancy agreement that covers late payment of rent?

To be honest if they are having difficulty paying rent then this problem is not likely to go away, will probably get worse.

By all means write/telephone and suggest setting up a DD/SO but the tenant seems unaware that rent is a priority and your friend may need to threaten with eviction to get this point across.

stator

She could say to the tenant:
"Set up a standing order because the next time you are late I will be serving you notice".
She can even provide the standarding order form, get the tenant to sign it and post it to the tenant's bank.
However the tenant can always cancel a standing order, so nothing is guaranteed. (Plus they might not have funds).
She could also consider changing the date the rent is due, eg to the day after the tenant gets paid. The tenant would have to agree to this. Or you could negotitate for the rent to be paid in smaller installments, eg every week instead of month.
But at the end of the day it's going to be a choice about evicting or not!

jjlandlord

Unfortunately "her own costs" are her responsibility.

Late or missed payments happen: She should have a buffer on her account.
If she does not, it may suggest that she is having financial difficulty herself.

stator

She could also ask for post dated cheques, but they could bounce

Pixie5740

My tenancy agreement says that if I pay my rent late then I'll be charged X% over and above the BoE base rate. If the TA your relative has with Tenant includes a similar clause then she could write to the T saying that if the rent is late again then she will enforce the penalty.

I agree with jjlandlord that if your relative doesn't have enough cash flow to allow for late payments then there's something wrong with the business model. Likewise not wanting to cause any conflict with a tenant who persistently pays late and going against the golden rule of not renting to friends & family makes this venture sound ill conceived.

Has your relative asked the T why the rent is persitantly late? There might be a simple solution such as changing the rent date. If a solution can't be found then your relative can use issue a Section 21 (assuming that any deposit was protected correctly) to start the repossession process and find tenants who will pay on time.

AdrianC

I'm with JJ on this - if she's running so close to her overdraft limit that paying the rent slightly late causes her to hit fees, what's going to happen when the boiler has a sulk or the roof gets hit with a storm or the tenant does a runner leaving the place trashed and rent unpaid?

eddddy

Just looking at it from a legal perspective (but perhaps not a practical perspective) ...


The tenant is breaching the terms of the AST by paying late, so assuming there is nothing in the AST about late payment fees, your relative could claim 'reasonably foreseeable consequential losses' from the tenant.

But the tenant could ask for proof of the losses - i.e. your relative may have to show bank statements etc to the tenant (which she may not want to do).

And then there is the argument about what is 'reasonably foreseeable'.

e.g. if your relative had to pay an unauthorised overdraft fee as a result of the late rent, the tenant could argue that he/she could not foresee that, because he/she didn't know your relative had so little funds in her account.

Continuing with that example, I guess your relative could put the tenant 'on notice' that future late payments might result in an overdraft fee - which would be claimed as a consequential loss.

But if the tenant really is struggling to pay the rent, they may just ignore any additional claims.

Argghhh

the golden rule is never let family or someone you know or a friend of someone you know rent your property. I have the same rule in mind when it comes tolending money to people as there is nothing worse than family for letting you down

Thrugelmir

Emanef wrote: »

I've had a google and it looks like she could serve notice, but that's not something she wants to do. She knows them through a friend and is happy for them to remain in there as long as they pay on time as they should.

There's no room for sentiment when running a business. Warn the tenants appropriately and if matters continue serve notice.

G_M

Variou bits of good advice above.

Just to add, if you do go down the eviction route, do you know how?

* S21 Notice. Timing? Validity?

* S8 Ground 8 Notice; conditions?

* S8 Ground 10 Notice; uncertainty?