Unpaid rent: what to do?

When you own a single rental unit, with a loan to repay each month, the impact of unpaid rent is great. What could be done to fix it ?

Upstream: preventing disputes

Be flawless

Maintaining courteous relations with a tenant is essential. Even when you are within your rights, always stay tuned. Do not let a problem drag on and provide “good service”: rent receipt, maintenance of the property, management of relations with other tenants, etc.

Everything you say by SMS, email, post, everything you do (or you don't do...) could be used by your tenant in the event of a dispute.

In the event of legal proceedings following an unpaid bill, you will at some point be heard by the judge.

There, we have 2 types of tenants:

  1. The one in good faith who acknowledges his debt but asks for a delay for the settlement/leaving the premises according to the evolution of his situation.
  2. The one who explains that he did not pay anything because the accommodation was unsanitary, that all the money went to heating and that he was the victim of neighborhood disturbances.

The second type of tenant will not hesitate to look for any excuse not to pay you and to produce all the elements at his disposal before the judge. He will benefit from free legal aid and will not be stingy with the process.

This is why I insist on the need to be both demanding of your tenants and above all of yourself.

What if your notary drafted the lease?

There are 2 types of leases:

  1. Under private breast: the one that you write yourself directly with the tenant (or the one written by the real estate agency.
  2. The notarized lease: it constitutes an enforceable title; it has the same force as a court decision. The lessor can therefore directly obtain the forced execution of the tenant's obligations without having to go to court.

Provided with a notarized lease, the lessor can directly request a seizure of wages / bank accounts. But this assumes that the tenant or his surety is solvent.

Please note: it will still be necessary to initiate legal proceedings to obtain the eviction of the tenant. In a majority of cases, this will therefore not be a panacea.

On the other hand, the cost remains quite reasonable: 1/2 month's rent + formalities + VAT; for example around €360 including tax for a studio renting €500.

Steps in case of unpaid rent

Attempt an amicable conciliation

Your goal is:

  1. Resuming payment of rent.
  2. The recovery of all or part of the sums due.

Here are the steps I follow when I see unpaid rent:

– Repoint my accounts. It happens that some zealous tenants pay at 30 or 31. At that time, I quickly skip a payment.

- Make a phone call to find out about them. This makes it possible to take stock of the situation and to see if the forgetting is fortuitous. And this is often the case; in 80% of the situations, it is an “oversight” and a simple reminder unblocks the situation.

- The tenant can also report difficulties: employment, separation, suspended benefits ... If everything has gone well for years, I will obviously give the tenant some credit and be accommodating on the deadlines. Generally, I trust as long as the given word is kept. We then set together a conciliation plan; a very cordial letter can follow by resuming the negotiated points "thank you for the agreement found, I take good note of your wish to settle XXX for 6 months".

- If after the phone call, the payment does not follow, I go to the follow-up mail. At first, one or two weeks after the conversation, a simple letter seems sufficient to me. The recommended may seem a little aggressive to the distracted or bona fide tenant. You have to think "customer" and spare the susceptibilities.

- If a month or more after the conversation, nothing still comes, a polite recommended. He will mention the date of the phone call, the date of the first letter, and will request payment within one month.

- If the payment problem is linked to CAF or MSA type allowances, the easiest way is to see directly with them what paper is missing. Sometimes I even print the form directly and hand it over to poorly informed tenants.

- If all the papers are in order with the CAF or the MSA, but the tenant keeps the allowance, you have the possibility of requesting a direct payment. I do not use it by default in order to simplify my accounting, only in case of difficulties.

Request the guarantor and unpaid rent insurance

If the amicable phase with the tenant does not yield results, the guarantor must be informed. The ideal is to call him first if you have his phone number or to send him an email.

Failing to have these elements or to obtain an answer, then opt for a registered letter with acknowledgment of receipt.

Do the same with your insurer if you have taken out unpaid rent insurance. Be careful to be aware of the general conditions and special conditions: the tenant must meet certain criteria (income, employment, etc.) and compensation may be subject to a waiting period (nothing before 6 months for example) and be limited in time (nothing after 2 years for example).

It is during this dispute with your tenant that you will be able to judge the quality of your insurance…

To note: reform of the deposit 2022

Since January 1, 2022 and the rewriting of article 2288 of the civil code :

  1. The guarantor is no longer required to copy a strictly imposed statement.
  2. The sanction in the event of disproportionate bail is reduced.

Guarantees concluded before the old law remain valid; those signed since January 1, 2022 are slightly more favorable to the owner by simplifying the surety process and potential disputes.

Initiate legal proceedings

In the event of failure of your amicable steps and seizure of the deposit, when the trust is broken, a contentious procedure is necessary. The bailiff is a valuable ally in this process.

This begins by issuing an order to pay, around €157:

This may be enough to unblock the situation, in 50% of cases from what I have experienced. For the other 50%, it ends up in court. The bailiff takes care of the subpoena; order included, all costs amount to approximately €350.

During my last experience, I was summoned one morning to BREST. The President of the District Court reviews the various cases to be dealt with and sees whether or not a lawyer represents one of the parties. Cases involving a lawyer go first in order to release them. Each lawyer pleads in one minute: he requests the termination of the lease (plaintiff) or the dismissal of the case for lack of documents (defendant). Then they all flee and the President calls the other defendants.

He examines the documents provided by the bailiff, can suspend the resolutory clause and grant a delay to the tenant; mine was entitled to 2 months. It was obviously quite unnecessary ... Once the decision is rendered, the owner asks the bailiff for a command to leave the premises. The tenant has 2 months to pack his bags. If he refuses, the bailiff draws up a report of the difficulties and requests on behalf of the lessor the assistance of the public force… on condition that he is not in the winter period.

I didn't need to go that far since the tenant left on his own afterwards. A word on the work of the bailiff: the tariff is regulated for all his acts and in the end, compared to a classic case which involves a lawyer, the cost is modest as regards the follow-up and the advice provided.

Theoretically, the costs related to the eviction are charged to the debtor but it is still necessary that he is solvent and not eligible for an over-indebtedness procedure. It is generally quite illusory to expect to recover the costs advanced in the absence of a deposit.

But your priority at this time is different: take back possession of the accommodation and rent it out as soon as possible. Go ahead, stay positive and make a point in 15 / 20 years ;).

I earned my first income on the web in 2012 by developing and monetizing the traffic of my sites (AdSense ...).

Since 2013 and my first professional services, I have had the opportunity to participate in the development of more than 450 sites in more than +20 countries.

Also read on the blog

View all articles
    • Cecilia
    • 26th December 2016

    I really like the way you deal with the tenant, in the event of unpaid bills. I see that you are quite patient as a donor. You do things the way they should. I take note of these steps. 🙂

      • invest
      • September 10, 2018

      Better a bad deal than a good trial :).

      it does not always succeed! Sometimes the tenant has trouble realizing and gets locked into bad choices.

      I have 3 tenants before the district court since 2009 ... for at least 15 where we have reached an amicable agreement with derisory concessions and losses.

      The most important thing is to get the apartment back quickly in the event of bad debts and to avoid any damage ...

A comment ?