What Should Landlords Do About Rent Arrears?

What should you do in the first week rent is late?

Make contact within 24 hours, ask what has happened, and get any repayment promise in writing the same week. Early arrears are a cashflow problem, and they only become a legal problem when nobody talks about them.

Make contact the day the payment misses

Email the tenant on the due date or the morning after, stating the amount owed and asking when it will be paid. Keep the tone businesslike, because that email may end up as an exhibit.

Follow up by phone within three days if nothing comes back. A lost job, a bank change or a delayed benefit payment all produce the same missed standing order.

Put the payment plan in writing

If the tenant can pay but not all at once, agree a schedule that clears the arrears within three to six months on top of the ongoing rent. Set out the dates and amounts, and have both parties sign it.

A plan that demands £600 a month from someone who is £300 short is a plan that fails in week two. Judges notice when a landlord offered something realistic and the tenant still defaulted.

Keep the records a judge will ask for

• A running rent account showing every charge, payment and running balance.
• Every email and text, saved rather than screenshotted.
• Dated notes of phone calls, written up the same day.
• Proof of service for any letter or notice, including the postage receipt.

Courts decide arrears cases on the rent account, not on your recollection. A gap in the schedule is the single most common reason a possession claim is adjourned.

How should you escalate rent arrears step by step?

Seven stages take you from a missed payment to an enforced judgment, and each one has a trigger point and a price. Working through them in order is what keeps a Ground 8 claim defensible.

Step 1: written reminder and a rent statement

Send the reminder with a statement attached showing the arrears figure. Attaching the numbers stops the conversation turning into a disagreement about how much is owed.

Step 2: A formal arrears letter

By week three or four, send a letter by recorded delivery naming the total arrears, the payment history and a deadline. Say plainly that possession proceedings follow if the deadline passes.

Copy in any guarantor at this point rather than at the end. Most guarantee deeds require you to notify the guarantor promptly, and a late demand gives them an argument.

Step 3: universal credit managed payments

If the tenant claims Universal Credit, apply for the housing element to be paid straight to you. This is the single most effective step available before the arrears reach the Ground 8 threshold.

Step 4: call on the guarantor

Send a written demand under the guarantee deed setting out the sum due and the date you need it. A guarantor who is jointly and severally liable can be pursued for the whole balance, not a share of it.

Check the deed covers a periodic assured tenancy rather than a fixed term that has ended. Guarantees drafted before May 2026 sometimes stop at the end of the original term.

Step 5: serve the section 8 notice

Use Form 3A, the private rented sector notice seeking possession, and state every ground you rely on with the arrears figure. Guidance on giving notice to evict tenants confirms that a notice served on or after 1 May 2026 gives you up to 12 months to issue the claim.

Serve it properly and keep the proof. A notice with the wrong ground, the wrong date or no evidence of service is the fastest way to lose a hearing you should have won.

Step 6: possession claim and money judgment

Issue at the county court on form N5 with the particulars on N119, and claim the rent arrears in the same proceedings. Doing both at once saves you a second fee and a second wait.

Step 7: warrant, bailiff and enforcement

If the tenant stays past the date on the possession order, apply for a warrant of possession so a county court bailiff can carry out the eviction. The money judgment then needs enforcing separately.

What each stage costs and how long it takes

The fees below are the civil court fees that took effect on 13 July 2026, published in the EX50 fee schedule. The court timings are the published medians rather than best cases.

On a £1,200 a month tenancy you are roughly £3,600 down before you can serve, and nearer £8,400 by the time the bailiff attends. Court fees alone reach about £706 on a claim that runs to enforcement.

Can you get universal credit paid direct to you?

Yes. A Managed Payment to Landlord sends the housing element of Universal Credit straight to your account, and you can request one at any point once the tenant is in arrears.

When you can ask for a managed payment

The DWP guide for landlords on Universal Credit and rented housing sets out the triggers. Two months’ arrears or more lets you request a managed payment or a rent arrears deduction, and one month built up by persistent underpayment also qualifies.

Apply through the Apply for a Direct Rent Payment service online. You will need the tenancy start date, the rent, the arrears balance and the tenant’s details.

Third party deductions towards the arrears

Separately from the ongoing rent, the DWP can deduct up to 15% of the tenant’s standard allowance and pay it to you against the arrears. That rate can drop if the tenant already has sanctions or other deductions running.

It is slow money, but it is money that arrives without a court order. A £4,000 balance will not clear this way, though the arrears stop growing while the rent itself is paid direct.

Tenants still on housing benefit

Where the tenant remains on legacy Housing Benefit, the council can pay you direct once they are eight weeks or more behind. Landlords who let regularly to benefit claimants should also check that their DSS landlord policy does not exclude the tenancy type.

Local Housing Allowance rarely matches the market rent in full. The shortfall stays the tenant’s responsibility and is still arrears if it goes unpaid.

Which section 8 grounds cover rent arrears?

Ground 8 is the mandatory arrears ground and now needs three months’ unpaid rent, while Grounds 10 and 11 are discretionary and cover smaller or repeated arrears. All three carry a four-week notice period.

Ground 8, the mandatory arrears ground

The government’s guide to the Renters’ Rights Act confirms the threshold rose from two months to three months, or 13 weeks where rent is paid weekly or fortnightly. The arrears must hit that level both when you serve and when the judge hears the case.

If the tenant pays enough to drop below three months the day before the hearing, the mandatory ground fails. That is why experienced landlords always plead Grounds 10 and 11 alongside it.

Grounds 10 and 11, the discretionary routes

Ground 10 covers rent lawfully due and unpaid at the date of the notice and when proceedings begin, with no minimum. Ground 11 covers persistent late payment even where nothing is outstanding on the day of the hearing.

Both leave the decision to the judge, who asks whether possession is reasonable. A clean rent account showing 14 late payments in 18 months is what wins a Ground 11 case.

The universal credit disregard you need to know about

Schedule 1 to the Renters’ Rights Act 2025 tells the court to ignore any arrears that are unpaid only because the tenant has not yet received a Universal Credit housing award. Those sums come out of the Ground 8 calculation.

In practice a tenant waiting on a first UC payment can sit at three months on your rent account and still defeat Ground 8. Check the claim status before you serve, rather than after you have paid the issue fee.

What happens once the claim reaches court?

You issue at the county court, wait a median of 7.6 weeks for a hearing and order, then wait again for a bailiff date. Median time from claim to repossession is 27.1 weeks, so budget seven to nine months from the missed rent.

Issuing the claim and what it costs

A possession claim in the county court costs £415 to issue as at September 2026. Include the arrears claim on the same particulars so the judge can deal with money and possession together.

Bring the tenancy agreement, the deposit protection paperwork, the Section 8 notice, proof of service and the full rent account. Missing deposit paperwork is a standing defence to an arrears claim.

The hearing and the possession order

Ministry of Justice possession statistics for April to June 2026 record 23,635 landlord possession claims, 9,715 warrants and 6,560 repossessions in the quarter. Claims were up 6% on the same quarter of 2025.

On Ground 8 proved, the judge must order possession, usually in 14 days. On the discretionary grounds you may instead get a suspended order that lets the tenant stay while they pay down the arrears.

Getting a money judgment for the arrears

Ask the court for judgment for the arrears, the daily rate to the date of possession and your fixed costs. That judgment is what turns unpaid rent into an enforceable debt.

A separate money claim later costs £455 on a balance between £5,000 and £10,000, or 5% of the value above that. Claiming it in the possession proceedings avoids the second fee entirely.

How do you recover the money you are owed?

Possession and payment are two different fights. Winning the property back gets you a judgment, and enforcing that judgment is what gets you paid.

Enforcing a county court judgment

Pick the method that matches what the ex-tenant has. Enforcing against someone in steady PAYE work looks nothing like enforcing against someone who owns a flat.

Chasing the guarantor

A guarantor named in a properly executed deed can be sued for the arrears in the same way as the tenant. In many cases they pay on the letter before action, because a CCJ would affect their own mortgage.

Check the deed was signed as a deed and witnessed. An unwitnessed guarantee is the flaw most often found at the point you need to rely on it.

What the deposit will and will not cover

Deposits are capped at five weeks’ rent below £50,000 annual rent and six weeks at or above it, so a deposit rarely clears three months of arrears. Claim the balance through the court and remember that the property then stands empty, which is when unoccupied property cover matters.

You cannot dip into the deposit mid-tenancy. Deductions are proposed at the end of the tenancy, and the scheme’s free adjudication service decides any dispute.

Does insurance cover rent arrears?

Rent guarantee insurance does, and it is the only cover that pays your rent when a tenant simply stops paying. Standard landlord policies do not, because no insured damage has happened.

What rent guarantee insurance pays

A rent guarantee policy pays the rent for six to twelve months while you pursue possession, usually with a monthly cap around £2,500 and an excess period of the first month. Premiums run from about £150 to £300 a year.

With Ground 8 now needing three months of arrears and a median 27.1 weeks from claim to repossession, the exposure a policy removes has grown by several thousand pounds. That is a different calculation from the one landlords made before May 2026.

What legal expenses cover adds

Most rent guarantee products bundle legal expenses cover, which funds the solicitor, the court fees and the bailiff. A defended possession claim runs to £2,500 to £6,000 in legal costs, against roughly £30 to £100 a year for the cover.

Buying it after the arrears start does not help you. Insurers apply a waiting period and exclude anything you already knew about.

Where rent guarantee stops

Insurers will decline a claim if the tenant was not referenced to the standard set out in the policy, or if you failed to serve valid notices. Rent guarantee is also not the same thing as loss of rent cover, which only pays when the property is uninhabitable after an insured event.

Neither covers an ordinary void between tenancies. If you are unsure which sections you already hold, our guide to what landlord insurance is sets out how the parts fit together.

How do you stop arrears happening again?

Reference properly, take a guarantor where the income is tight, and collect rent in a way that flags a missed payment on day one. Prevention costs tens of pounds and arrears cost thousands.

Reference properly and take a guarantor

Full referencing costs £20 to £50 per applicant and covers employment, income, credit history and the previous landlord. Ask for the previous landlord’s own tenancy paperwork rather than a phone number a friend answers.

Guarantor services charge roughly three to four weeks’ rent a year where no family guarantor is available. Reference every adult separately in an HMO, because one non-payer in a shared house is still your loss.

Set up collection so missed payments show immediately

• Collect by standing order dated two days after the tenant is paid.
• Reconcile the rent account weekly rather than monthly.
• Set the rent day away from the 1st, when bank queues are longest.
• Inspect at agreed intervals and act on what you see.

Landlords running several tenancies should watch arrears across the whole book rather than property by property. A portfolio landlord policy can put rent guarantee on every let under one renewal date.