Unpaid rents: the best strategies to protect yourself

When planning to start real estate rental, you should expect countless more or less major issues.

Problems between landlord and tenant are numerous. How to repair a water leak in a wall? or even how to remove an object from a pipe?

Best practices to avoid unpaid rent

• Strictly select tenants: request supporting documents (income, employment contract, guarantees).
• Check solvency: require that rent does not exceed 30-35% of income.
• Request a joint guarantor: parent, relative or guarantor via specialized organization.
• Subscribe to unpaid rent insurance (GLI): covers the landlord in case of tenant default.
• Write a clear lease: mention payment terms and late penalties.
• Maintain a good relationship with the tenant: encourage communication to anticipate possible delays.
• Prefer automatic withdrawal: secures and simplifies payment.

While it may seem easy to address these points, it will not be the case with unpaid rent. When both parties cannot find common ground, the matter will be referred to the competent authority. To avoid this, it is imperative to find effective solutions to prevent unpaid rents.

How to protect yourself against unpaid rent?

Method	Objective	Main Advantage
Rigorous tenant selection	Avoid risky profiles	More security from the start
Income verification	Ensure solvency	Guarantee that the rent is affordable
Joint guarantee	Additional guarantee	A third party covers in case of default
Unpaid rent insurance (GLI)	Financial protection for the landlord	Full coverage
Clear and precise lease	Prevent disputes	Legal reference in case of problem
Landlord-tenant relationship	Encourage dialogue	Anticipate before a non-payment occurs
Automatic debit	Secure payment collection	Regular and no missed payments

To better clarify our ideas, it is important to provide you with a definition of unpaid rent. In law, a tenant is considered in default when they do not pay their rent on the date specified in the lease.

In general, both landlords and tenants must fulfill the conditions written in this contract. The rent payment date is part of it.

If this is not respected, the landlord has the option to initiate court proceedings up to the termination of the lease. However, there are various procedures in practice that avoid this extreme solution.

The tenant is invited to inform the landlord of the situation. They must explain the difficulties they encountered causing the failure to respect the payment date. They should attempt a negotiation in order to find amicable solutions avoiding potential risks of eviction.

If you are a beneficiary of APL or Personalized Housing Assistance, you are in default when you have not paid 2 or 3 remaining months of rent. This case is possible when the allowance will be paid to the landlord.

The CAF or Family Allowance Fund has the right to suspend the allowances. Yet, this only deepens the debt once again. To avoid this stage, there is nothing like reacting in time at the first unpaid rent.

To know how to avoid unpaid rents, also discover our tips to estimate a house for free, explore best practices to calculate your mortgage installments, and learn about the right time to resell a rental property.

How to protect yourself as a landlord?

In the previous section, we mentioned advice to help the tenant face the problem. But now we will side with the landlord.

Many face unpaid rents and do not know how to react. Fortunately, there are many solutions to protect oneself from rental debt.

If this is also your case, it is strongly advised to carefully choose the future tenant of your property. Even if the profile claims to be a good candidate, take the time to verify not only their reliability but also their solvency. This relates to their rental capacity based on their income.

To know if they are able to pay their rent on time, you have every right to ask for some supporting documents.

A copy of the latest pay slips, an employment contract, receipts of previous rents, an income tax return, and a financial statement for liberal professions are among the documents to be requested.

To be protected from unpaid rents, the tenant must earn 2.7 or 3 times the amount of the required rent. If they cannot meet this criterion, you are likely taking a significant risk.

Besides this, the landlord can protect themselves by subscribing to an insurance called Unpaid Rent Guarantee or Unpaid Rent Insurance.

Thanks to this solution, they can be compensated for the rent amount from the first unpaid month until the day of eviction or the tenant’s departure.

Even better, this insurance can cover temporary vacancy of the property, property damages, as well as litigation costs. The following section helps you choose between subscribing to a private GLI insurance and the free Visale scheme.

Additionally, it is possible to require the tenant to have a guarantor to better protect against unpaid rent. When they cannot pay their rent on the agreed date, the landlord directly turns to their guarantors to obtain payment.

Besides the physical guarantor, there is also the online guarantor, bank guarantee, and the Visale guarantee. For the latter, it is rather Action Logement that acts as guarantor. Therefore, it takes care of paying the rent, then the tenant repays their debt to the organization.

What are the risks if I don’t pay my rent?

Even if you are an honest and solvent tenant, life can test you following a dismissal or an expensive separation. As a result, you may be unable to properly pay your rent.

The first thing to do is to talk about it with your landlord. This amicable agreement can often lead to the implementation of a repayment plan. This consists of spreading the repayment of the rental debt over several months.

If you take no initiative and do not contact the landlord, be aware that they can take action against you.

They may first try to engage in an amicable dialogue with you. After this initial exchange, if you still refuse to pay the rent, they have the right to serve you a formal notice by sending you a letter.

In this letter, they warn you that they will take the matter to the judge if they do not receive the requested amount within a set deadline. If you do not respond following the formal notice, they will seize the local judge.

In this context, the bailiff comes into play and manages the case. If you are finally ready to pay, you must address him, which officially resolves the dispute. Otherwise, the landlord is entitled to initiate legal action.

How to cancel a rent debt?

It is imperative to address a rental debt as quickly as possible before the amount becomes too large. There are several support measures that can help the tenant regularize the situation.

They allow the tenant to contest a debt, but this favor does not exempt from paying the rent. The tenant can indeed contest it, but must still pay the rent. It remains possible to spread the payment of debts over a fixed period.

Among these different measures, it is wise to seek advice from legal advisors to guide you through all the procedures. Just like the Annecy property manager, it is easier to find them online.

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“},{“id”:”faq-question-6334ceb3baf11″,”visible”:true,”title”:”How to avoid unpaid rent from a single father?”,”content”:”If this candidate meets the solvency criteria, the owner will not have to worry about unpaid rent. In any case, they must establish a solid rental file justifying their financial capabilities.”}],”className”:””} –>