Tenants always paying late, what can I do? (SCOTLAND)

[Landlordneedadvice]

I was made redundant from my job last year when I was on maternity leave. I decided to invest in a property to renovate and then let out to replace my income while being a stay at home parent. We’ve gone through the proper channels, we have an agency who dealt with finding the tenants and is responsible for collecting rent and the day-to-day dealings. Current tenants have been in one year now, and over the last 6 months they have had to be chased with paying the rent. When they applied to let the house they expressed interest in taking it for three years as they are a family with a teenager at the local school. But every month I am having to chase the agency to chase them to get them to pay the rent. They’ve been told it is important they pay and they were told to set up a standing order. Clearly this has not been done and I’m now in a position I have no confidence in them as tenants and think I need to evict them. They have never provided any explanation for the late payment and unless they were being chased I just don’t think they would bother paying.
The rental agency haven’t been great, and are only chasing them when I get onto them about it. Their fee comes from the monthly rent, so they should have an interest in making sure it is paid too. They have said we only have grounds to evict if they don’t pay for three months, and as they do always pay in the end, we can’t use this as a reason. I honestly don’t know what to do. I would rather not have to evict the tenants but they are causing me stress month after month because I have overheads to cover for the rental property and I need to find the money from elsewhere if it’s not in on time.

I’m considering just selling the property and investing elsewhere if this situation continues.

I am not an expert in Scottish tenancy at all - but I would suspect that (echoing an oft-repeated DH/MIL trope) you don't have a tenant problem, you have a rental agency problem. Before you go to the extreme of selling the property, are you able to switch agents?

The agent is one well recommended in the local area, they seem to have a strong hold of the rental market here. They have told us all the steps they have taken e.g speaking to the tenants, leaving voicemails, sending out letters, getting them to sign agreements etc. Albeit a lot of that is a result of us pushing them to do something about the repeated late payments.

As an update, this months rent has now been received (3 days late) with no explanation or apology for the delay. The agency has agreed to go and do an inspection to see if we are dealing with any other problems from the tenants.

I feel I am an understanding person and really do not want to have to go down the route of eviction if I don’t have to. They will likely not get a good reference from the agency due to their late payments and as they have a teenager in the local school I don’t want them to go through the upheaval of having to find another property locally. But I’m so annoyed that I feel they are just taking advantage now.

If they are 3 days late and that makes you late with your own bills eg you have to pay an over draft charge or interset you could send them ain voice for the £6 over draft charge and perhaps a £40 collection charge which we have in the Uk for late payments so that they realise being late has consequences for you as well as for them. If being 3 days late costs them an extra £46 they might in future pay on time!

I would first talk to the tenants - find out if the date of payment of rent due is a problem due to timing of income vs outgoings. Eg if the rent is due on 25th of the month but their income only arrives on 28th of the month then that may be why they are always late. If you can accommodate a payment date that fits in with their income receipts so that you are the first bill paid then that may resolve the issue?

If so insist that they set up a standing order so that the rent is paid on the agreed date going forward every month.

You can't just make up arbitrary collection charges, in Scotland or England!

I suggest you join a landlords association for proper advice OP.

Talk to them and ask them why they've not set up a standing order. If you get excuses then honestly I would consider eviction. Speak to the agents to find out the eviction process. Many Scottish estate agents are solicitors too. Is yours one?

Rent is a number one priority bill along with council tax and should be paid when due, not treated like an optional bill they can put off until convenient. The issue here is if they don't see it as an important bill now then it can very easily become even less so and they very well may just stop paying.

When they first moved in they were late paying by a week and then asked to change the date, which was done. They have not asked to change this date again, so I believe they are just not making the rent payment a priority.

I will look into a landlords association and will have an in depth conversation with the agency after they have completed the inspection and take it from there. If there are no issues with their upkeep of the property then I will again stress they must set up a standing order.

NoBaggy., the are not arbitrary. They have been part of English law for years in the Commercial Debts(Interest) Act and regulations - ..although I just checked and they apply if a business is late in paying you which is why my advice above about speaking to a solicitor is important.
www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs So it would be £70 not £40 (plus interest) if a business paid late. However even with a consumer if they breach a contract and that causes you loss - eg you might have a £6 over draft charge or your credit rating might be shot to pieces as a landlord who then pays their mortgage late etc those direct costs are caused by the tenant's breach of contract.

Here's some information:

www.gov.scot/publications/private-residential-tenancies-landlords-guide/pages/grounds-for-eviction/

Also, join SAL (Scottish Assn of Landlords) - it costs about £100 but has good resources, a helpline etc.

Even if you did have grounds to evict, the FTT process takes 4-6 months. I personally don't think it's fit for purpose.

This is why so many LL are selling up - between the PRT tenancy changes losing no-fault evictions, the taxation changes & increasing bureaucracy- it's no longer worth the hassle.

Thank you I will take a read.