Managing Rent Arrears: What Landlords Should Do

Rent arrears are every landlord's concern, but responding appropriately and promptly is essential. Taking swift action protects your income and prevents small problems from becoming major disputes.

Early Communication

As soon as rent becomes overdue, contact your tenant directly. Sometimes arrears result from simple mistakes—missed payments, bank errors, or confusion about payment methods. A friendly first conversation often resolves the issue immediately. Document all communication in writing, either by email or letter.

Understanding the Situation

Ask your tenant why they've missed payment. Have they lost their job? Are they experiencing temporary hardship? Understanding the cause helps you determine the best solution. Some situations warrant flexibility; others indicate a more serious problem requiring formal action.

Formalising the Agreement

If a tenant can't pay the full amount immediately, consider a payment plan. Put any agreement in writing, specifying when instalments are due and what happens if they're missed. This demonstrates good faith while protecting you legally. However, don't agree to unrealistic plans that simply delay the inevitable.

Formal Demands and Notices

If informal attempts fail, send a formal demand for payment. This should specify the exact amount owed, the date payment is due, and a deadline—typically 5-7 days. Keep a copy and proof of delivery. If payment isn't received, you can proceed with serving a Section 8 Notice, which is the formal legal step before eviction proceedings.

Legal Action

A Section 8 Notice requires two months' arrears (or one month in certain circumstances) and gives tenants two weeks' notice of your intention to seek possession. You must follow this process correctly—mistakes can delay proceedings significantly. Consider consulting a solicitor experienced in landlord and tenant law.

Court Proceedings

If a tenant doesn't pay after serving notice, you can apply to court for a possession order. This process takes several weeks and involves court fees. Even with a possession order, physically removing a tenant requires a bailiff, which incurs additional costs. Throughout this process, you'll likely receive no rent.

Prevention is Better

Reduce arrears risk by screening tenants carefully, building good relationships, and accepting payment methods that work for them. Some landlords use rent guarantee insurance, which covers losses from arrears and eviction costs.

While arrears are stressful, following proper procedures protects your legal position and increases the likelihood of recovering what you're owed.