What to do when a tenant defaults

For about four months, her tenant had not paid rent. Milly Nabatanzi’s attempts to speak to the tenant were futile since he returned home in the night and left very early in the morning. His was in arrears of Shs800,000 and all Nabatanzi wanted was the tenant to vacate. If you find yourself in Milly’s position, what do you do next?

Wait
According to Noah Kiganda Ssonko, the managing director Ecoland Property Services, if your tenant owes you a small fraction of the rent or has only defaulted for a month, it is better to send an invoice, and if it is not paid, mark it in your tenant’s file for future reference.
You may choose to continuously notify your tenant through an email especially if it is a small amount owed. You may also choose to ignore the arrears, break the tenancy agreement and ask him or her to walk out silently.
“It may be a loss but you would probably have a new occupant soon who would be able to pay you promptly. You will also be in good terms with the tenant even after he has left,” he remarks.

Talk
If your tenant has been paying their rent promptly, it would be because they have a problem.
“As a landlord, you need to understand your tenant’s situation when they try to explain and be patient enough to wait upon the date they have promised they would be paying, ” says Nabatanzi.
In such cases, it is important that you get mutual understanding with your tenant who may ask for a grace period depending on the type of problem they have. Nabatanzi condemns cases where landlords lock their tenants out of the house before they listen to them.
If your tenant is just a naughty one, you may choose to hire property management services which may help you collect your rent.

Frequent reminders
Use a variety of techniques to get your money, including tracking down the tenant and calling them repeatedly until the debt has been paid.
You may also give your tenant a notice to leave the premise on agreement but leaving some items as security. This should, however, only be applied in the worst case scenarios. The security items can be left behind and be picked later when the defaulter gets money.
Kiganda advises that: “In such instances, both parties must agree upon evaluation the securities worth the owed rent. These securities can be written down and let there be a neutral person to be a witness just in case. Both parties may also agree that the landlord sells the items in order to recover the money due.”

Authorities
Nabatanzi had to involve the local chairperson who called her defaulting tenant and were able to talk.
“The tenant left valuable assets after the local chairperson had evaluated the property which would suit the amount due. He picked the property which we kept at the chairperson’s place after he had paid his debt,” she says.
If a tenant has stayed long at a premise without paying their rent and their bill has accumulated into millions, it is best handled in court.Even for unpaid rent less than a million, the landlord can choose to involve local authorities such as the area chairperson or police.
“Go to court if the money owed is substantial and you think you will recover it from the tenant if a court makes them. Otherwise you may waste a lot of money on hiring lawyers and due to bureaucracy, your case may take a very long time so it is better to talk things out and let court be the last resort,” Kiganda recommends.
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