What Happens If a Tenant Stops Paying Rent?

One of the biggest concerns landlords have is what happens if a tenant stops paying the rent.

Most tenancies run perfectly well, but circumstances can change. A tenant may lose their job, separate from a partner, become unwell or simply fall behind financially.

Whatever the reason, rent arrears need to be dealt with properly and promptly.

The rules around possession also changed significantly in England from 1 May 2026, when Section 21 was abolished for assured tenancies and landlords moved onto the new possession framework under the Renters’ Rights Act 2025.

For landlords in Bishop's Stortford, Stansted, Sawbridgeworth, Takeley, Great Dunmow and the surrounding villages, here is what you need to know.

What Counts as Rent Arrears?

A tenant is in rent arrears as soon as they fail to pay rent by the date it is due.

For example, if rent is due on the first of each month and it has not been received, technically the account is already in arrears.

That does not necessarily mean you should immediately start possession proceedings.

Sometimes payments are simply late because of banking issues, salary dates or an oversight.

The important thing is to identify the missed payment quickly and contact the tenant.

What Should a Landlord Do First?

The first step should usually be communication.

Contact the tenant and establish why the rent has not been paid.

There may be a straightforward explanation and the payment may be made immediately.

If there is a genuine financial problem, it is useful to understand the position early rather than allowing several months of rent to build up before doing anything.

Keep records of all communication and maintain an accurate rent statement showing what has been charged, what has been paid and what remains outstanding.

Should You Agree a Payment Plan?

Sometimes a payment plan can be the most sensible solution.

If a good tenant experiences a temporary financial problem but has a realistic way of clearing the arrears, agreeing additional payments alongside their normal rent can avoid unnecessary disruption for everyone.

However, any arrangement needs to be realistic.

There is little benefit in agreeing a repayment plan that the tenant clearly cannot afford.

If you do agree one, put it in writing and continue to maintain a proper record of the outstanding balance.

Can You Evict a Tenant for Rent Arrears?

Yes.

Rent arrears remain a valid reason for seeking possession.

Since 1 May 2026, private landlords with assured periodic tenancies use the Section 8 possession process rather than Section 21.

The government guidance confirms that a landlord can seek possession where a tenant has failed to pay their rent, but the appropriate legal ground and notice procedure must be followed.

How Much Notice Do You Need to Give?

For assured periodic tenancies, the current government guidance states that where possession is being sought because of rent arrears or repeated late payment, the landlord will normally need to give four weeks' notice using the appropriate Section 8 notice.

That does not mean the tenant must automatically leave after four weeks.

The notice is the start of the legal possession process.

If the tenant remains in the property after the notice expires, the landlord normally needs to apply to court for a possession order.

When Does the Court Have to Give Possession?

There are different rent arrears grounds and they do not all work in exactly the same way.

Some grounds are mandatory, meaning the court must grant possession if the landlord proves that all the legal conditions are satisfied.

Others are discretionary, meaning the court considers whether it is reasonable to grant possession.

This is why landlords should avoid assuming that any missed payment automatically guarantees possession.

The exact arrears level, payment history and ground relied upon matter.

If possession proceedings become necessary, getting specialist legal advice is usually sensible.

Can You Just Change the Locks?

No.

A landlord should never try to physically remove a tenant without following the proper legal process.

If the tenant does not leave after a valid possession notice and the landlord obtains a possession order, further court enforcement may still be required if the tenant remains.

The current process can ultimately involve a warrant and court bailiffs.

Changing locks, removing belongings or trying to force a tenant out without the correct process can create serious problems for a landlord.

Does the Deposit Cover Unpaid Rent?

A tenancy deposit can potentially be used towards unpaid rent at the end of the tenancy, subject to the tenancy terms and the deposit scheme process.

However, landlords should not view the deposit as a replacement for rent during the tenancy.

The deposit is normally limited to a maximum amount set by law, so if significant arrears build up it may cover only a small proportion of the outstanding balance.

It may also be needed for damage, cleaning or other valid deductions.

What If the Tenant Leaves Owing Money?

If the tenant leaves the property but rent remains outstanding, the debt does not automatically disappear.

A landlord may still pursue the former tenant for unpaid rent.

Whether it is commercially worth doing so depends on the amount owed, the tenant's circumstances and the likelihood of recovering the money.

Where necessary, this can involve formal debt recovery or court action.

These costs should always be considered against the amount likely to be recovered.

What About a Guarantor?

Where a tenancy has a properly executed guarantor agreement, the guarantor may also be liable for rent arrears depending on the wording of the agreement.

This can provide landlords with additional protection, particularly where an applicant has weaker affordability or credit history.

However, a guarantor is only useful if they have been properly referenced and the guarantee has been correctly documented.

It should not be treated as a substitute for proper tenant referencing.

What If the Tenant Is Constantly Late Rather Than Not Paying?

Repeated late payment can still become a serious management issue.

Even if the tenant eventually catches up each month, persistent arrears can make it difficult for the landlord to meet mortgage payments and other property costs.

The Renters' Rights Act possession framework includes grounds relating to rent arrears and repeated late payment.

Again, the correct legal process needs to be followed.

Can a Landlord Use Section 21 Instead?

Not for new possession action started after the Renters' Rights Act reforms took effect.

Section 21 was abolished for assured tenancies from 1 May 2026.

Landlords now need a statutory reason, known as a ground for possession, when seeking to recover a property.

Those reasons include rent arrears, antisocial behaviour, selling the property and the landlord or certain family members wishing to move into it, subject to the relevant conditions.

This makes accurate tenancy management and record keeping more important than ever.

Keep Proper Records

If rent arrears ever reach the stage where possession proceedings are necessary, good records become extremely important.

Landlords should retain:

rent statements,
bank payment records,
tenant correspondence,
copies of notices,
the tenancy documentation,
deposit protection information,
and evidence of any repayment arrangements.

A properly managed rent account should make it very clear what was due and when.

Make Sure Your Own Compliance Is in Order

Another important point is that possession proceedings can be affected by landlord compliance.

For example, government guidance states that a court will not be able to make a possession order in certain circumstances where the tenancy deposit has not been correctly protected.

This is one reason why dealing with compliance correctly from the start of the tenancy is so important.

You do not want to discover a documentation problem only after rent arrears have already arisen.

Should Landlords Have Rent Guarantee Insurance?

For some landlords, rent guarantee cover can be worthwhile.

A suitable policy may help cover unpaid rent and, depending on the policy, legal expenses connected with recovering possession.

However, policies normally have eligibility requirements.

The tenant may need to pass specified referencing criteria, and landlords usually need to follow particular procedures once arrears arise.

It is therefore important to understand exactly what a policy covers rather than assuming every missed payment will automatically be reimbursed.

How We Deal With Rent Arrears at Willmott & Lake

With a fully managed property, we monitor rent payments rather than waiting for the landlord to notice that money hasn't arrived.

Rent is processed through PayProp, giving us and our landlords a clear record of what has been received and what remains outstanding.

If a payment is missed, we can contact the tenant quickly, establish what has happened and keep the landlord updated.

Where arrears cannot be resolved through normal communication, we can advise on the next stage and coordinate with the appropriate legal professionals where formal possession action becomes necessary.

Formal solicitor, court and enforcement costs are separate from our management fee, but we can manage the process alongside the landlord.

Fully Managed Lettings in Bishop's Stortford

For many landlords, rent collection is only one small part of property management.

There is also compliance, inspections, maintenance, deposit protection, tenant communication and staying on top of changes in legislation.

Our Fully Managed service is 10% plus VAT and includes ongoing management throughout the tenancy.

We charge £0 setup fees, £0 deposit registration fees and we do not add mark-ups to contractor invoices.

We currently manage properties across Bishop's Stortford, Stansted, Sawbridgeworth, Takeley, Great Dunmow and the surrounding villages.

If you're a landlord who would like to discuss your property, or you are considering moving an existing tenancy over to professional management, contact Willmott & Lake on 01279 801165 for a no obligation conversation.