More and more Tenants are in Arrears

Tenant’s arrears tracker was recently published by LSL Property Services which highlights the rise in the amount of tenants that are currently two or more months behind in their rental payments. Property experts are now warning landlords to be more careful than before and to make sure they are protected again rent arrears. Traditional landlord insurance won’t cover this so extra cover needs to be taken, especially during this uncertain time for many people.

2.3% of tenants in England and Wales fall into this category which meant that the number had risen within the first quarter of this year from 90,000 to 94,000 which is causing much difficulty for landlords. Obviously there is no quick solution to this problem once you are in it but there are a few things that landlords can do to minimize their risk.

Joe Davision is from Paul Crowley & Co Solicitors and he has said, “We are seeing an increasing number of landlords who themselves in difficulties when their tenants are in serious arrears. There is no easy way out, however there are some steps which will minimise trouble.

“First we would recommend that landlords do their homework properly. It is surprising how many landlords neglect to obtain full, trustworthy references for their tenants. If a prospective tenant cannot provide two worthwhile references, then it’s best to leave the property unoccupied until the right tenant comes along.

“For extra security, run some light background checks and get the tenant to put up a guarantor. These measures do not require as much effort as you may think and can be vital in protecting your assets.

“You can never be too safe though, and I’d also recommend issuing a section 21 notice as soon as the tenancy begins. Though hopefully you will not need to unit it, it can save vital time later on.

“If you wish to begin proceeding following an arrears issue, the law is very tenant-friendly. The only way of evicting a tenant with arrears is through an order of possession, a process which can take months from start to finish.”

He then went on to explain that once the section 21 is in place is does need two months notice before anything can happen. This is why having it at the start of the tenancy is a good idea. There is a downside to this though and that is that can only take place once the Assured Shorthold Tenancy has expired. He carries on to state that in essence the section 21 is an insurance policy which will hopefully never be needed but does provide some piece of mind.

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