There is no denying that being a landlord can be stressful. It’s beneficial to have rental income as a way to diversify your earnings, but it does come with a stress or two, especially if you are dealing with tenant arrears. There are a range of reasons as to why a tenant might fall behind on payments, such as a drop in their income or an unexpected cost that couldn’t be avoided. Though you are sure to understand that a lot of tenants are struggling due to the rising cost of living, rental arrears can leave you out of pocket and struggling to keep up with your own outgoings. Thankfully, there are a number of effective steps that you can take to recover money.
How to Recover Money in 2024 as a Landlord
- Court Proceedings – A lot of landlords consider taking a late paying tenant to small claims court, as a way to force them to pay what is owed. This can be a time consuming and costly process, but often the threat of legal proceedings is enough to make someone pay.
- Interest – If you are seeking rent from a commercial tenant, then the Late Payment of Commercial Debts (Interest) Act 1998 enables you to claim interest, and it also enables you to recover reasonable debt recovery costs. This approach can help you to recover unpaid rent, and also the costs you incurred from chasing it.
- Rent Deposits – The majority of landlords take a rent deposit before a tenant moves into the property. It’s a way to mitigate the risk of losing out financially when a tenant fails to pay, as you can simply take the funds out of the deposit. However, if you continue to rent to a tenant, it’s important that the rental deposit is topped up again to avoid there being nothing left if they fall into arrears again.
- Commercial Rent Arrears Recovery – You can also make use of Commercial Rent Arrears Recovery (CRAR) which is a way of recovering money without the lengthy court process. For CRAR to apply, the rent must be overdue by a minimum of seven days, and be payable before the notice is given. With CRAR, you can enlist enforcement agents to collect the rent or take control of goods.
- Statutory Demands – Serving a statutory demand could frighten a tenant into paying, as it highlights the threat of bankruptcy or liquidation, depending who you are renting to. If your tenant owes at least £750 as a company or £5,000 as an individual, you can serve a statutory demand.
Recover Tenant Arrears at Cobra Financial
At Cobra Financial, we understand the stress that comes from being owed money as a landlord. Regardless of whether you are renting out a residential property or commercial premises, there are a variety of ways to recover the money that’s rightfully yours, and we are on hand to help. Contact us today to find out more.