Rent arrears payment plans that work

Why it matters

Most arrears cases that end in eviction could have been resolved with an affordable plan agreed two months earlier.

Legal requirements

• Accepting rent with knowledge of arrears does not automatically waive a possession ground under a periodic tenancy.
• Any agreed variation should be recorded in writing to avoid dispute.
• A plan does not extinguish the debt unless you expressly write it off.
• Pre action conduct expectations apply if the matter later reaches court.

Common mistakes

• Agreeing a plan the tenant plainly cannot afford so it fails within a month.
• Making the arrangement verbally with no written confirmation.
• Stopping the rent account records once a plan starts.
• Treating the plan as a substitute for continuing to chase current rent.

Practical guidance

• Ask for a simple income and expenditure picture before setting the figure.
• Set the plan at current rent plus a small affordable amount towards arrears.
• Confirm the plan in writing with dates, amounts and what happens if it fails.
• Review after two payments and adjust rather than abandoning it.

Structuring the plan

The formula that works is contractual rent on the due day, plus a fixed extra amount on the same day, until the balance clears. Avoid lump sums promised for a future date, because they almost never arrive. If the arrears cannot clear within twelve months at an affordable rate, discuss whether the property is simply unaffordable and whether a planned move suits both sides better.

Keeping options open

Record every payment and every missed payment. Send a short written update monthly showing the balance. If the plan fails you then have a clear, dated history that shows you acted reasonably, which helps at court and reduces the chance of a hearing being adjourned for further information.