Rent arrears remain one of the most difficult situations landlords can face.
Since the Renters’ Rights reforms came into force, the possession process in England has changed, and landlords now need to understand which statutory grounds apply, how much notice must be given and what evidence will be needed if the case reaches court.
The key is to deal with arrears early and keep accurate records from the first missed payment.
Start with a reliable rent schedule
A landlord considering possession should be able to produce a clear rent account showing:
- the rent due;
- the date each payment became due;
- payments received;
- missed or partial payments;
- the running balance; and
- any repayment arrangements agreed.
Avoid relying solely on bank statements.
A simple rent schedule makes it much easier to explain exactly how the arrears arose and how they developed.
Communicate before the arrears escalate
A missed payment does not always mean the tenant intends to stop paying.
The problem could involve:
- a temporary income reduction;
- delayed wages;
- benefit-payment problems;
- illness;
- relationship breakdown; or
- another short-term financial difficulty.
Contact the tenant promptly and keep the communication professional.
Early discussion may result in the tenant clearing the arrears or agreeing a realistic repayment plan before possession proceedings become necessary.
Put repayment arrangements in writing
Where a repayment plan is agreed, record it.
The agreement should make clear:
- the current arrears;
- the normal rent that must continue to be paid;
- the additional repayment amount;
- payment dates; and
- what happens if the arrangement is not maintained.
Do not allow an informal conversation to become the only record of what was agreed.
Ground 8: serious rent arrears
Ground 8 is an important mandatory possession ground.
For a tenant paying rent monthly, the tenant generally needs to owe at least three months’ rent when notice is served and still owe at least that amount at the possession hearing.
Where rent is paid weekly or fortnightly, the equivalent threshold is generally at least 13 weeks’ rent.
If the ground is proved at the hearing, it is a mandatory ground, meaning the court is required to make a possession order.
However, landlords should not assume that reaching the threshold once guarantees possession.
If the arrears fall below the required level before the hearing, Ground 8 may no longer be available.
Four weeks’ notice
Ground 8 normally requires the landlord to give the tenant four weeks’ notice before possession proceedings can begin.
That notice period should be built into any timetable.
Landlords should also make sure the correct notice is completed properly and served in a way that can later be proved.
Errors made at this stage can delay the entire process.
Universal Credit delays need particular care
There is an important protection where the rent arrears arise because the tenant has not received Universal Credit that is due to them.
Landlords should therefore establish why the arrears have arisen rather than assuming the headline figure alone is enough to use Ground 8.
Accurate communication with the tenant can be particularly important in these circumstances.
Grounds 10 and 11 can also matter
Landlords may also encounter discretionary rent-arrears grounds.
Ground 10 can apply where some rent is unpaid.
Ground 11 can apply where the tenant has persistently delayed paying rent.
These are discretionary grounds.
That means even if the landlord proves the ground, the court still decides whether it is reasonable to make a possession order.
Evidence of the tenant’s payment history and the landlord’s attempts to resolve the issue can therefore become especially important.
Keep more than just financial records
A good arrears file may include:
- the tenancy agreement;
- rent schedule;
- bank records;
- correspondence with the tenant;
- repayment-plan agreements;
- notices served;
- evidence of service;
- benefit-related correspondence where relevant; and
- records of any support or flexibility offered.
The purpose is not to create unnecessary paperwork. It is to make sure the landlord can show clearly what happened.
Consider the wider position before serving notice
Possession should not automatically be the first response to arrears.
Ask:
- Is the problem temporary or ongoing?
- Has the tenant explained the cause?
- Is a repayment arrangement realistic?
- Are benefits or other payments delayed?
- Which possession ground actually applies?
- Is the required evidence available?
- Has the correct notice period been allowed?
A rushed notice can be less useful than a properly prepared case.
How does the position differ elsewhere in the UK?
The possession grounds described above apply to England.
Wales uses occupation contracts and has its own possession procedures.
Scotland uses the Private Residential Tenancy system and separate eviction grounds.
Northern Ireland also has its own rent-arrears and notice rules.
Landlords should therefore use the procedure applicable to the nation where the property is situated.
Evidence matters as much as the arrears
Rent arrears are ultimately about numbers, but possession cases depend on much more than a balance on a spreadsheet.
Good communication, accurate records and the correct possession ground can make a major difference.
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Important information
NetRent does not provide legal advice. The articles represent our understanding of rental property law and are for general information only.