The legal landscape governing landlord and tenant relationships in England is undergoing significant reform, and the consequences for landlords getting it wrong can be severe.

The introduction of the Renters’ Rights Act on 1 May 2026 represents the most significant overhaul of residential tenancy law in a generation and includes the abolition of Section 21 “no fault” evictions.

This means that landlords can no longer obtain possession as a matter of course. They must now rely on the revised Section 8 framework, which distinguishes between mandatory and discretionary grounds for rent arrears.

The mandatory ground for serious arrears now requires at least three months’ rent unpaid, up from the previous two-month threshold both at the date of service of the notice and at the date of the hearing.

Where this threshold is not met, landlords must proceed under discretionary grounds, with the court assessing whether possession is reasonable based on the tenant’s circumstances and payment history. Strict adherence to the statutory procedure is essential under this new regime.

Rent arrears arise when a tenant fails to pay rent, whether in whole or in part, by the date on which it is due under the terms of the tenancy agreement. What may begin as a single missed payment can quickly escalate into a pattern of mounting debt or informal arrangements, such as accepting partial payments or relying on verbal assurances, which are frequently used repeatedly without written confirmation.

Such arrangements, though often well-intentioned, can obscure the true extent of arrears, complicate future recovery action and diminish a landlord’s legal position should formal proceedings become necessary.

The scale of the issue should not be underestimated. Across both residential and commercial tenancies, arrears are accumulating at a pace that suggests a systemic problem rather than a series of isolated incidents, with more than one in five of all letting disputes caused by rent arrears in 2025, the highest proportion for five years.

Rising living costs, fluctuating interest rates, and broader economic uncertainty have all contributed to an environment in which tenants are increasingly struggling to meet their obligations.

For landlords who rely on rental income to service mortgages, maintain properties, and fund other commitments, even modest shortfalls can have a cascading effect on their own financial stability.

The issue is particularly pertinent for landlords who are new to property management, have inherited tenants, or lack robust systems for checks and documentation.

Houses of Multiple Occupancy, once perceived as reliable income generators, can be especially challenging due to variable income streams and unpredictable tenant payments. Without structured practices, even modest arrears can evolve into financial and administrative challenges.

The single most important step a landlord can take is to act early. From the outset, landlords should ensure that all payment terms are clearly documented in tenancy agreements, maintain accurate records of all payment and arrears, and confirm any informal arrangements in writing.

Seeking professional legal advice at the earliest stage of a potential issue is also necessary, particularly before issuing notices or commencing possession proceedings. 

In cases where arrears remain outstanding and informal resolution has failed, a County Court Judgment can provide a formal, enforceable record of debt.

Obtaining a Judgment through a County Court enables a range of enforcement options, including attachment of earnings orders, charging orders over property or engagement of High Court Enforcement Officers to recover the sums owed. 

Balancing debt recovery with long-term asset management requires diligence. It is a landlord’s responsibility to ensure that properties meet all legal and safety requirements, for example up to date gas safety and energy performance certifications as, if these documents are missing or expired, issues raised by tenants immediately escalate to a disputed process, making for a more lengthy, costly process overall.

Conducting affordability and reliability checks on prospective tenants further mitigates the risk of arrears, though no approach can entirely eliminate uncertainty.

Landlords can involve asset checks from a third party to help this approach, which can provide a more affordable option than an agent while still producing reliable results.

The quiet build-up of rent arrears across the property sector is, in truth, a debt crisis in the making. The accumulation of arrears alongside weaker enforcement strategies highlights the importance of structured management and early intervention, meaning waiting until the problem becomes unmanageable is no longer a viable strategy, if indeed it ever was.

This new pressure is only furthered by the imminent reforms under the Renters’ Rights Act which impacts the entire rental market and underscores the necessity for landlords to adopt a proactive, legally informed approach to arrears management. 

Residential landlords who act promptly and methodically will be best positioned to navigate the evolving regulatory environment. By taking formal enforcement where appropriate, both income and long-term assets can be properly protected before arrears begin to climb.

Edward Flanagan, debt and asset recovery partner at law firm, Shakespeare Martineau