Rent arrears under the Renters' Rights Act: mandatory grounds, the 3-month rule, and the process your agency needs

The most common question we've heard from landlords since 1 May: "What do I do if they stop paying?"

Under the old framework, the answer was a Section 21 notice with a backup Section 8 if needed. Section 21 is gone. The Section 8 process is now the only route to possession for rent arrears, and the rules around it have changed.

This post walks through what the law now says, what your internal process should look like, and what wins at tribunal. It's operational guidance for letting agents and property managers - not legal advice. For anything contentious, get a solicitor.

What changed about the arrears grounds

Three changes you need to know.

Ground 8 - the mandatory ground - has a new threshold. Before 1 May, two months' rent arrears was enough to trigger mandatory possession. Now it's three months at the date of the hearing. The notice period has also extended from two weeks to four weeks.

Ground 8A - a new mandatory ground - has been introduced. This applies where the tenant has been in arrears of at least one month, three times within the previous three years. Same four-week notice period.

Discretionary grounds 10 and 11 still exist but the court is now more cautious about granting possession on them where any arrears defence is raised.

The practical effect: you can no longer file possession when arrears hit two months. You wait until they hit three. The tenant has more time to either pay down or build a defence. Your documentation needs to be tighter to win.

What's not a ground any more

• Section 21 - no-fault possession. Gone. Cannot be used regardless of when the tenancy started.
• Persistent late payment without arrears. If the rent is always paid eventually, even if late, you don't have a ground.
• "The landlord doesn't like the tenant." Never was a ground. Agencies still try.

If any of these are the actual reason you're considering possession, you don't have a case. Don't issue a notice that won't survive court.

A process that holds up: from first missed payment to N5B

Build this process and run every arrears case through it. Variations cost cases.

Day 1 of missed rent

Automated reminder (text or email) the day after rent is due. Polite, factual, not threatening. Log the send.

Day 7

Personal call from the property manager. Find out why. Most arrears resolve at this stage - pay date misalignment, banking issues, temporary cashflow. Document what was said and any agreement to pay.

Day 14

Written confirmation of the conversation. If a payment plan was agreed, write it down and ask the tenant to acknowledge. If no contact, escalate to formal arrears letter.

Day 30 - one month arrears

Formal arrears letter. State the amount owed, the date paid up to, the consequence of continued non-payment. Reference Ground 8 in plain language. Copy the guarantor if there is one.

Day 60 - two months arrears

Pre-action letter from the landlord (or the agent acting for the landlord). This isn't a notice — it's the last stop before notice. Request payment within seven days; state intent to serve notice if not received.

Day 75-90 - approaching three months

This is the critical window. Once the tenant hits three months arrears, you can serve a Section 8 notice on Ground 8 with four weeks' notice. The notice must be on form 3, must specify the grounds, and must state the arrears amount as at the notice date.

Day 90 + 28 - notice expires

If arrears are still at three months or more on the day the notice expires, you can issue a possession claim - form N5B for accelerated, or N5 for standard, depending on the case.

Court hearing

Arrears at the date of the hearing must still be three months or more for Ground 8 to bite. If the tenant pays the arrears down below three months before the hearing, Ground 8 fails and you fall back on the discretionary grounds.

Each step is logged

Every email, every call, every conversation. The agencies that win are the ones whose ledger shows continuous, professional engagement.

Documentation that wins

Tribunals and county courts make decisions on paper. The arrears bundle that wins:

• Rent ledger from start of tenancy with every payment, every charge, and every shortfall reconciled.
• Communication log showing every contact attempt with date, channel, and outcome.
• Copies of all formal letters with proof of service.
• The signed tenancy agreement, prescribed information, deposit certificates, and Written Statement of Terms. If any of these are missing, possession is at risk irrespective of the arrears.
• The Section 8 notice with proof of service (recorded delivery, certificate of posting, or process server's confirmation).

Anything missing from this bundle costs you the case. We've seen possession claims fail because the tenancy agreement couldn't be located in the agent's filing system. Build the bundle as the arrears grow, not at hearing prep.

When mediation actually works

Mediation works when:

• The tenant has the means to pay but a temporary problem (job change, illness).
• The arrears are under three months and the tenant is engaging.
• The landlord wants the rent more than they want the tenant out.

Mediation doesn't work when:

• The tenant is non-responsive across multiple contact attempts.
• Arrears are growing month-on-month with no payments.
• There's a pattern of arrears under Ground 8A.

The triage call is critical. Mediation costs money and time. Don't refer cases that won't resolve. The Pre-Action Protocol for Possession Claims expects mediation to be considered, not used in every case.

How clean records change the outcome

The single biggest predictor of whether an arrears case succeeds isn't the merits. It's the quality of the records.

Agencies that log every call, every text, every chase get clean possession orders. Agencies that improvise the paper trail at the eleventh hour get adjournments and dismissals.

This is partly why we built Odjo - every call into the agency is logged automatically, every email is tracked, every commitment is captured against the case file. By the time an arrears matter hits notice, the bundle is already 80% built. But the principle is process, not product. If you're doing this manually, do it religiously. We covered the broader idea in rent increases and tribunal challenges.

Frequently asked questions

Can I still take a guarantor straight to court?

Yes. The guarantor's liability is separate. If your guarantor agreement is properly drafted, you can pursue them via the small claims track for the unpaid rent without waiting for possession.

What if the tenant claims disrepair as a defence?

This is now common. The court will look at whether the disrepair was reported, when, and what the landlord did about it. Cases can settle as a set-off (rent reduction in exchange for arrears reduction). This is why repair logging during the tenancy matters so much.

Can Universal Credit or housing benefit be paid direct to the landlord?

Yes, where the tenant is in arrears of two months or more. Apply via DWP using form UC47. This often resolves the arrears without possession.

Does the four-week notice period apply if the tenant is also breaching another term?

The notice period attaches to each ground separately. If you're serving on multiple grounds, the longest notice period applies.

The takeaway

Rent arrears was always the most documentation-heavy part of letting work. Under the Renters' Rights Act, the standard has gone up. The grounds are tighter, the notice periods are longer, and the courts expect a clean evidential trail.

The agencies that were already running tight arrears processes will adapt. The ones that improvised under the old regime will lose cases.

If you're rebuilding your arrears process from scratch, start with the day-1 reminder and the rent ledger. The rest of the process flows from there. OdjoAI makes it easier than ever to track these triggers and set up automatic messages.