How do I avoid having rent arrears?
It is unlikely that landlords will recover all outstanding losses in rent arrears cases. Debt recovery can be expensive and time consuming, but it is sometimes cost effective to do-it-yourself using the Small Claims Court. The best solution of course would be to avoid arrears in the first place.
There are steps you can take to minimise the risk of rent arrears although it is never possible to eliminate that risk completely.
Having a comprehensive Tenant’s Application Form (Tenancy Proposal Form) is crucial. This should contain the tenant’s personal details, employment history and contact information. It also provides valuable evidence for using Ground 17 under the Housing Act 1988 if a false statement is knowingly made by the tenant or someone acting on his behalf.
Always screen potential tenants and do a credit check. It is not an absolute guarantee against arrears but a basic check is quick and quite inexpensive. Insist on the rent being paid by standing order. These are easy for the tenant to set up and have several advantages besides saving time. They are regular, there’s no anxious waiting for cheques coming through the post and you know straight away if there’s a problem.
If a payment fails to materialise it means one of two things: the tenant has ordered the bank to stop the payment or there are no funds. In either case, you can act immediately if required.