Tenant Not Paying Rent? A Wales Landlord's Guide to Arrears
Step-by-step guide for Wales landlords dealing with rent arrears. From the first missed payment to the section 182 possession notice and court proceedings under the Renting Homes (Wales) Act 2016.
By Jonathan Chan, Director, Morgan Jones Estates & Lettings · Last updated: 10 July 2026
Once a contract holder (tenant) is two months behind on a monthly rent, you're in section 181 territory — the one ground where, if the timing's right, the court has to grant possession. Getting there takes a sequence worth following properly: contact, documentation, a formal letter, then the notice itself. This guide walks through each step under the Renting Homes (Wales) Act 2016.
Step 1: Don't Assume the Worst—Contact Your Contract Holder First
A missed rent payment doesn't automatically mean your contract holder is avoiding you — hardship, a banking error, or simply forgetting a payment date happen more often than deliberate non-payment. Before taking formal action, pick up the phone or send a professional email.
Ask what's happened, and whether it's a temporary issue you can work through together. If the contract holder is genuinely struggling, a payment arrangement is faster than legal proceedings and keeps them housed. Whatever's agreed, document it — the date, what was said, and any promises made — and if they commit to a repayment date, get it in writing rather than leaving it vague.
Often, a friendly but firm first contact solves the problem. If it doesn't, move to the next step.
Step 2: Document Everything
From this moment forward, keep meticulous records. You'll need them if the dispute goes to court.
- Payment history: Print or screenshot bank statements showing when rent was paid and when payments were missed.
- Occupation contract: Have a clean copy available. It should clearly state the rent amount, due date, and payment method.
- Communications: Save all emails, texts, and letters. Note dates and times of phone calls.
- Notice records: Keep copies of any formal notices you issue, with proof of delivery.
- Photos and evidence: If the property suffers damage related to non-payment (e.g., you must enter to address repairs), document it visually.
Courts rely on clear evidence. The more detailed your records, the stronger your case.
Step 3: Issue a Formal Arrears Letter
If informal contact doesn't work, send a formal letter. This isn't a legal notice yet—it's a serious warning that shows you've tried to resolve this reasonably. Send it by recorded delivery or email with read receipt.
The letter should include:
- Contract holder's full name and property address
- Amount of rent owed and the dates of missed payments
- A statement of the original rent amount and due date
- A request for payment within a specified timeframe (typically 7–10 days)
- A clear warning that if payment isn't received, formal legal action will follow
- Your contact details
This letter demonstrates good faith and creates a clear record. If the arrears continue, the court will see you tried to resolve it without legal action.
Step 4: The Possession Notice for Serious Rent Arrears—The Critical Step
Once at least two months' rent is unpaid on a monthly contract, the contract holder is in "serious rent arrears"—the possession ground set out at section 181 of the Renting Homes (Wales) Act 2016 for a periodic standard contract. You then serve a possession notice citing that ground under section 182, using Form RHW20. This is the formal legal step that changes the game.
Periodic or Fixed-Term Contract? The Ground and Notice Section Differ
Arrears are defined identically in both cases—purely by rent periods, never a cash figure—but the section numbers you cite depend on your contract type. Form RHW20 covers both; you just tick the section that applies.
| Contract type | Ground (arrears test) | Notice section | Form | Court window |
|---|---|---|---|---|
| Periodic standard contract | Section 181 | Section 182 | RHW20 | 14 days to 6 months after notice |
| Fixed-term standard contract | Section 187 | Section 188 | RHW20 (same form, different section cited) | 14 days to 6 months after notice |
"Seriously in arrears" means: 8 weeks' unpaid rent on a weekly, fortnightly or four-weekly contract; two months' unpaid rent on a monthly contract (the near-universal case for MJ's book); more than three months in arrears on a quarterly contract; or 25%+ more than three months in arrears on an annual contract. There's no monetary threshold in either section—arrears are defined only by rent periods (Renting Homes (Wales) Act 2016, ss.181/187).
What Is the Possession Notice?
The possession notice is a legal document that:
- Formally notifies the contract holder that they're in serious breach of the occupation contract by non-payment
- Requires them to catch up on all arrears within a specified period
- Warns that if they don't comply, you can start possession proceedings
How to Serve the Possession Notice
The notice must be in writing and can be served by:
- Hand delivery to the contract holder or someone at the property
- Registered post or special delivery
- Email (if the occupation contract allows electronic communication)
- Leaving it at the property in a sealed envelope addressed to the contract holder
Always keep proof of service. You'll need this for court.
What Happens After the Notice Period?
If the contract holder doesn't clear the arrears within 14 days, you can apply to court for a possession order. This is a mandatory ground: the court must grant possession if the arrears were still "serious" both on the day the notice was given and on the day of the hearing (subject only to a Convention-rights defence)—it isn't a broad discretionary judgment about the contract holder's character or effort. In practice, that means paying the arrears back down below the threshold before the hearing defeats the ground, even if the notice was validly served.
Step 5: Court Possession Proceedings
If the possession notice period expires without payment, you can apply to the court for possession. This is where a specialist solicitor becomes valuable. The court will:
- Review your evidence and the contract holder's defence
- Check whether the arrears are still "serious" (per the ss.181/187 test) on the day of the hearing, not just the day the notice was given
- Grant the possession order if that test is met—this ground is mandatory, subject only to a Convention-rights defence
Court proceedings take time and cost money — court fees plus any solicitor's fees you instruct. If the arrears are substantial and informal recovery has failed, it's the only route to get the property back.
Prevention: Better Than Cure
The best way to handle arrears is to never reach that stage. Consider:
- Thorough contract holder referencing: Use a professional referencing company to verify income and rental history. A contract holder with a record of non-payment should be screened out.
- Rent guarantee insurance: Protects your rental income if a contract holder stops paying. Premiums and excess terms vary by provider and by how thorough your referencing was — compare policies rather than assuming they're all equivalent.
- Clear payment terms: Specify the rent amount, due date, and payment method in the occupation contract, with no ambiguity.
- Regular communication: If there's ever a late payment, address it immediately and friendly. Don't let small issues become big ones.
- Professional management: If you own multiple properties or struggle with contract holder relations, a letting agent or property manager handles this for you—and takes the stress away.
FAQs: Your Arrears Questions Answered
Can I evict a contract holder for any amount of arrears?
No. Under the Renting Homes (Wales) Act 2016, you can only pursue the serious rent arrears possession route once at least two months' rent is unpaid (on a monthly contract). Before that threshold, you can chase payment formally, but you can't use the possession route.
What if the contract holder pays down the arrears before the court hearing?
It can defeat the ground. The court can only grant possession on the serious-arrears ground if the contract holder was still "seriously in arrears" (per the ss.181/187 test) both on the day the notice was given and on the day of the hearing—so paying back below that threshold before the hearing removes the mandatory basis for possession, even though the notice was validly served. Some courts will also suspend or adjourn if the contract holder proposes a credible payment plan for arrears plus ongoing rent, though that's a separate, discretionary consideration.
Can I deduct arrears from the deposit?
No. The tenancy deposit is protected under separate legislation and can only be used for damage or cleaning beyond normal wear and tear, or other specific breaches set out in the contract—not unpaid rent. Arrears are a separate debt, pursued through the possession/court route or a money claim.
Do I need a solicitor to serve a possession notice?
You don't legally need a solicitor to serve the notice, but it's strongly advisable. A poorly drafted notice, or one citing the wrong ground or section for your contract type (periodic vs fixed-term), can be challenged in court, wasting time and delaying possession further.
How long does it take to get a possession order?
There's no fixed published timescale—it depends on your local county court's listing backlog and whether the contract holder contests the claim. Budget for months rather than weeks, and factor in the mandatory 14-day-to-6-month notice window before you can even apply. Early action, once arrears reach the threshold, matters because delay only extends the process.
Can I change the locks if the contract holder isn't paying?
Absolutely not. This is illegal eviction. Even where arrears are substantial, you cannot exclude a contract holder from the property without a court possession order and the proper enforcement process. Doing so exposes you to civil liability and potential criminal prosecution. Always use the court process.
Key Takeaways
- Act early: The moment rent is late, reach out. The longer you wait, the harder it becomes.
- Document everything: Clear records of payment history, communication, and notices are essential for court.
- Follow the law: Section 182 possession notices have strict requirements. One mistake can derail your case.
- Know the threshold: You can only use formal possession proceedings once at least two months' rent is unpaid.
- Consider prevention: Thorough contract holder checks and rent guarantee insurance prevent most arrears problems.
- Get professional help: A solicitor's fee is small next to the cost of a case thrown out on a technicality — money well spent protecting your property and your compliance position.
Don't Navigate This Alone
Handling contract holder arrears requires precision, patience, and knowledge of Welsh housing law. One wrong step—a notice served incorrectly, a deadline missed, a procedure overlooked—can delay possession by months or even result in your case being dismissed.
If you're dealing with arrears right now, or you want to avoid this problem altogether through proper contract holder screening and professional management, our team can help. We manage the rent collection, chase arrears, serve notices, and handle court proceedings—taking the stress and risk off your shoulders.
Book a consultation with our Wales landlord specialists today. We'll assess your situation, explain your options, and advise whether to pursue payment, a formal arrangement, or possession proceedings.
Disclaimer
This guide is provided for informational purposes only and does not constitute legal advice. Regulations may change. Always verify current requirements with official sources such as Rent Smart Wales or seek professional legal advice for your specific circumstances.
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