One of the biggest concerns for landlords is a tenant falling behind on rent. Not only can it create financial strain, but it also raises legal and ethical questions about how to proceed. This guide walks you through what to do if your tenant stops paying rent, from the first missed payment to potential legal action.
1. Stay Calm and Assess the Situation
It can be frustrating when rent isn’t paid on time, but reacting emotionally can make matters worse. Consider whether the missed payment was an oversight or a sign of financial difficulty.
What to do:
Check your records to confirm the rent is overdue.
Reach out to the tenant with a polite reminder via email, text, or phone.
Allow a short grace period if applicable (some tenancy agreements include this).
2. Communicate with the Tenant
Open communication can often resolve rent arrears before they escalate.
What to do:
Contact the tenant to understand why they haven’t paid.
If they are facing financial hardship, discuss payment plans or partial payments.
Keep a record of all conversations and agreements.
3. Send a Formal Rent Arrears Letter
If the tenant has not responded or paid after your initial outreach, a formal approach is necessary.
What to do:
Send a written notice of arrears outlining the amount due and any late fees.
Reference the tenancy agreement and highlight the consequences of non-payment.
Request payment within a set timeframe (e.g., 7 days).
4. Serve a Legal Notice
If the rent remains unpaid, the next step is to issue a legal notice.
What to do:
Issue a Section 8 Notice if the tenant is at least two months behind on rent.
Alternatively, if you prefer to regain possession without citing rent arrears, a Section 21 Notice (no-fault eviction) may be an option, depending on your circumstances.
Seek legal advice to ensure proper notice periods and requirements are met.
Note: The proposed Renters’ Rights Bill aims to abolish Section 21 no-fault evictions and modify grounds for possession due to rent arrears. It’s essential to stay updated on legislative changes that may affect this process.
5. Consider Mediation or Rent Repayment Agreements
Some tenants genuinely struggle with finances but want to pay. Mediation can help find a solution without court proceedings.
What to do:
Offer a structured repayment plan if appropriate.
Engage a mediation service if communication breaks down.
Ensure any agreements are documented in writing.
6. Start Possession Proceedings if Necessary
If the tenant refuses to pay or negotiate, you may need to escalate matters legally.
What to do:
File for a possession order through the courts.
Consider a County Court Judgment (CCJ) to recover unpaid rent.
Follow all legal guidelines to avoid unlawful eviction claims.
Note: The Renters’ Rights Bill proposes increasing the threshold for mandatory possession due to rent arrears from two to three months and extending the notice period from two to four weeks.
The Role of a Managing Agent
A managing agent can handle rent collection, arrears management, and legal proceedings on your behalf. By staying on top of payments and addressing arrears early, a professional property manager can prevent rent issues from escalating and ensure compliance with changing legislation.
How to Prevent Future Rent Arrears
While rent arrears can’t always be avoided, taking proactive steps can reduce the risk.
What to do:
Vet tenants thoroughly, including credit checks and references.
Require a guarantor for tenants with lower financial stability.
Consider rent guarantee insurance for added protection.
Set up automated rent reminders for tenants.
Work with a professional managing agent to oversee rent collection and compliance.
Final Thoughts
Dealing with rent arrears can be stressful, but following a structured and legal process ensures the best outcome. Communication, documentation, and professional advice can help you resolve issues efficiently while protecting your rental income.
If you need assistance navigating tenant issues or ensuring legal compliance, reach out to our team for expert guidance.
Article by Andrew Overman | Partner | Location Location East
