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Get legal adviceHow to deal with a tenant whose rent has fallen into arrears
If you're having trouble ensuring your tenants pay their rent, these guidelines
explain how to keep track of rent payments and recover any money owed.
Missed payments and rental arrears can be extremely stressful for both landlords and tenants.
Often, the easiest way to resolve the problem and get back on track is to speak to your tenant directly, but in some cases further steps will be required.
This guide explains how to deal with arrears and what to do if your tenant misses a payment.
1. Talk to your tenant
If rent remains unpaid after several days, start by calling your tenant or send a text message or email to check in.
If you don’t hear anything back, send a formal letter by first class or hand-delivered mail.
Your letter should request that the outstanding arrears are paid immediately and ask the tenant to ensure future payments are made in full on or by the due date.
You should explain that unpaid arrears could result in court action being taken against the tenant and state that you may make an application to the court for possession of the property should more than two months' rent go unpaid.
It’s important to treat the matter of a missed payment or arrears sensitively and to be polite and courteous throughout.
If you show unreasonable behaviour, this could affect the outcome if the issue ends up going to court.
If your tenant is struggling financially, you could direct them towards a charity such as Step Change oder Shelter for advice.
Consider offering your tenant a repayment plan
Another option for resolving arrears is to arrange a repayment plan with your tenant.
This could be through spreading the amount of money owed to you across future rent payments, for example.
There is no obligation for you to do this, but it may be easier than going through the eviction process.
2. Contact your insurer
Many landlord insurance policies will cover missed payments and tenant arrears.
If you have insurance, your provider should be able to tell you how this works, how much it covers, and how to claim.
If a tenancy comes to an end with money outstanding, you may be able to apply to take this from your tenant’s deposit by registering a claim with the relevant tenancy deposit scheme.
Keep a record of payments
As a landlord you should keep a record of when rent payments are due and when they are paid by your tenants.
Send receipts to your tenants detailing the date the rent was paid, the time period it refers to, the amount paid, and the amount outstanding.
If it’s a joint tenancy, remind tenants they are equally responsible for paying the rent and for clearing any debt owed.
If you do decide to make an application for possession against a tenant (or tenants) based on them not paying rent, you will be required to provide a copy of all rent payment transactions and communication between you and the tenant.
3. Send a follow up letter or contact the guarantor
If you still received outstanding rent 14 days after it is due, send another letter explaining that if your tenant doesn’t pay, you'll be forced to take the matter further and seek possession of your property.
If your tenant has provided a guarantor, send the guarantor a letter advising them that the tenant hasn't paid the rent in line with the tenancy agreement.
4. Consider action to claim possession of your property
If after 21 days you still haven’t received any rent from your tenant, you should send a third letter to the tenant and (if applicable) their guarantor.
This should be the final step before considering further action to reclaim your property.
Use this letter to confirm your intention to take legal action if the rent isn’t paid.
If your tenant has gone a month without paying rent, and another month is now due, you can consider them to be two months in arrears.
You can use our free letter template to demand outstanding rent that’s been owed by a tenant for at least eight weeks.
5. Serve a notice of eviction
If you haven’t received any rent at this point, and your tenant hasn’t tried to communicate with you or to resolve the situation, you have the right under the Housing Act 1988 to take action to claim possession of your property.
You can do this through a Section 8 or Section 21 notice.
A Section 8 notice informs your tenant that you intend to take them to court if they don't pay within a further 14 days. To service a Section 8 notice a landlord needs a legal reason for doing so, such as rent arrears, which they need to prove at a court hearing.
The notice must be served in the prescribed form in order to be valid, so make sure you follow the process carefully.
If the tenant pays back their arrears, this will invalidate the Section 8 notice if it went to court.
To give your tenants notice using a Section 8, you must:
- Fill in a ‘Notice seeking possession of a property let on an assured tenancy'.
- Specify on the notice which terms of the tenancy have been broken.
- Give the tenants between two weeks’ and two months’ notice to move out, depending on which terms they’ve broken.
You can apply to the court for a possession order if your tenants do not leave by the specified date.
An accelerated possession order application is also possible if you are not claiming back any unpaid rent.
Section 21 vs Section 8
Section 21 and Section 8 of the Housing Act 1988 are typically used to evict tenants living in England and Wales.
There are key differences between the two:
- Section 21: if the landlord wants the property back after the contract term has ended.
- Section 8: if the tenant has broken the terms of the tenancy.
While a landlord might have grounds for a Section 8 eviction notice, it might be more effective to serve a Section 21 in cases where the fixed term of a tenancy is coming to an end.
A Section 21 notice is sometimes called a 'no fault' notice because a landlord does not need to give a reason for the notice.
Read our guide to how to legally evict your tenant for more information on the difference between Section 21 and Section 8.
6. Go to court
If your tenant doesn’t respond to your demands for rent, or challenges the eviction notice, you are entitled to take legal action to seek possession of your property.
You may also ask the court to make a judgement against your tenant for the arrears of rent and reasonable costs incurred.
The judge will dismiss your case if there is no reason for the tenant to be evicted or if you haven’t followed the right process.
Rent arrears court actions
The court can order the tenant to do one of the following:
- Leave the property before a specified date stated in the order.
- Stay in the property as long as they pay or obey the conditions of the order.
- Pay you a specified amount.
- Leave the property and pay a specified amount to cover rent arrears, court fees and legal costs.
A judge can also add a money judgement to cover rent arrears, court fees and legal costs.
If you do get a money judgement against the tenant, you will have six years in which to enforce it.