Tenant arrears a widespread issue

Redbrick Landlords Insurance has reported that nearly half of landlords admit they have had tenants fall behind on their rental payments at some point in their letting career.

 

The survey of landlords showed that 46% had experience of tenant arrears, with an average of two months’ rent owed by the tenant. Landlords have a limited number of options available if the tenant does fall behind – evict, negotiate a reduced rental rate or help the tenant to obtain advice regarding the availability of state benefits.

 

Tony Armitage, Redbrick Landlords Insurance managing director, said: "Unfortunately, tenant arrears are one of the major occupational hazards of letting property and all landlords must be prepared for a tenant to fall behind on payments at some point in their letting career. Carrying out a full tenant assessment to get a good tenant in the first instance helps, but even the best tenants can experience financial difficulties, particularly in the current economic environment, and fall behind on their payments.

 

"The good news is that landlords can protect themselves further by taking out a robust insurance policy that is specifically designed for landlords and includes rent guarantee and legal expenses insurance. This will cover the loss of rent if the tenant defaults and also the legal costs if eviction becomes the only option.

 

"This is particularly beneficial for landlords with large portfolios and multiple tenancies to look after. It is more likely that these landlords will experience tenant arrears, compared with those with smaller portfolios."