The continuing Renters’ Rights Act nightmare – what happens if the first month’s rent isn’t paid?
In a Property118 comment on 27 December, member “Spock” said:
“I have a student property. Traditionally, I have always asked for the rent payment for the first month a few days before the start of the tenancy start date. I never hand out keys until I know that everyone has paid the first month’s rent. If I can’t receive any rent before day 1, then if even one person hasn’t paid, then I can’t hand out any keys, which obviously creates problems. Have I read this correctly ? Am I unable to accept any rent before day 1?”
I’m guessing there may be other landlords wondering this. Here is my answer.
You don’t have to wait for the rent until Day 1, but you must not refuse to hand over the keys after the agreement has been signed. If you do, there is a real risk that you may have to pay fines (called “penalties”) of up to £40,000.
When both landlord and tenant have signed a tenancy agreement for a new Assured Tenancy, the tenancy is said to have been “entered into”. Usually, the agreement will be dated when the last person who is a party to the agreement has signed. If the commencement date of the tenancy is a later date then the time between the two dates is called the “permitted pre-tenancy period”.
You can accept rent in advance during (not before) the permitted pre-tenancy period, just as you have done in the past. This is limited to one month’s rent or 28 days rent if the rent payment period is less than a month. You can also accept payment of the agreed deposit up to the cap.
So far there is not really much if any, change to what you have been doing. But after the tenancy has been entered into you cannot refuse to hand over the keys even if the tenant never pays the first month’s rent, because that amounts to preventing occupation, which is equivalent to unlawful eviction or unlawful exclusion. That is an offence under the Protection from Eviction Act 1977 and now carries civil penalties of up to £40,000 under section 58 of the Renters’ Rights Act 2025 as an alternative to prosecution.
Make no mistake, refusing to hand over the keys is a serious offence.
If the tenant does not pay the first month’s rent and has moved in, then you can issue a notice under s.8 of the Housing Act 1988 specifying ground 10 and giving 4 weeks’ notice before you start court proceedings. But ground 10 is discretionary. The judge might refuse to grant an order for possession, or give the tenant time to pay, so that you would have to go back to the court again if the tenant never pays any rent.
Alternatively, you can wait until there are three months’ rent arrears and then give a four‑week section 8 notice specifying Ground 8 (serious rent arrears). You could also specify Ground 11 (persistent delay in paying rent). Note that there must be 3 months’ rent outstanding both on the date of the Section 8 notice and on the date of the hearing.
Tenants who understand this and want to game the system can, in practice, go a long time without paying rent.
Suppose the landlord and tenant meet on 1st May 2026 and both sign an agreement for a tenancy to start on 14th May. The landlord cannot ask for any rent until the agreement has been entered into. As soon as it is signed, the landlord asks for the first month’s rent, expecting the tenant to transfer the money there and then because that is what the agreement says they should do. The tenant says they will pay it on the day they move in. On 14th May, they meet at the property, and the landlord asks for the rent. The tenant says it will be paid the next day. The landlord cannot refuse to hand over the keys. They must give the keys to the tenant and let them move in.
The rent never arrives. The landlord gives 4 weeks’ notice specifying ground 10 expiring (say) 12th June and issues proceedings the next day. The court lists a hearing date of 10 August. The tenant has never paid any rent, but the court has discretion, and after hearing the tenant’s sad tale of woe, the judge grants 3 weeks to pay.
The tenant never pays. On 1 September, there are 3 months’ arrears outstanding, so rather than pursue the original claim, the landlord serves a new notice specifying ground 8 and on 30 September issues proceedings for a second time.
The hearing is on 25 November, and this time the court does grant an order for possession. The landlord pays to transfer the claim to the High Court for a writ of possession, and the bailiffs arrive at the property on 27 January 2027. The tenant has gone and has left the property in perhaps not quite as good a state as it was on 1 May 2026. The landlord has had no rent since the last tenant left, many months ago; meanwhile, they have been paying the mortgage, the insurance, and all the costs of the proceedings.
The tenant has lived rent-free for about 8 months.
All this was explained to the government during the committee stage of the Bill, but they ignored it.
Michael
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Member Since December 2022 - Comments: 30
1:32 PM, 29th December 2025, About 3 months ago
Reply to the comment left by Dylan Morris at 29/12/2025 – 12:09
Why? It’s on the same day?
Member Since August 2016 - Comments: 1190
1:45 PM, 29th December 2025, About 3 months ago
Reply to the comment left by Karen Dodd at 29/12/2025 – 13:32
Doesn’t matter if same day nowhere does the RRB provide for this.
Member Since August 2016 - Comments: 1190
1:51 PM, 29th December 2025, About 3 months ago
I assume it’s okay to tell prospective tenant that we will meet up face to face and you show me the cash or funds in your bank account. We then both sign contract, hand over keys, then you immediately make payment (either cash or bank transfer). At least you’re containing the situation somewhat by being face to face and seeing the funds are available before signing. No showing of deposit then no signing of contract.
Member Since December 2025 - Comments: 31
2:07 PM, 29th December 2025, About 3 months ago
Reply to the comment left by Dylan Morris at 29/12/2025 – 13:51
I think landlords and agents are going to have to come up with something like this. What we know for certain is that the procedure used will have to be absolutely watertight and that once a watertight procedure has been devised it will be essential that there is no deviation whatsoever under any circumstances.
Member Since December 2025 - Comments: 31
2:16 PM, 29th December 2025, About 3 months ago
Reply to the comment left by Michael Crofts at 29/12/2025 – 10:05
I have found a mistake myself. A landlord can require a tenancy (security) deposit up to the statutory cap before the tenancy agreement is entered into, provided it does not exceed 5 weeks’ rent (or 6 weeks where the annual rent is £50,000 or more) and is then protected in an approved scheme. Therefore in my hypothetical example the tenant would only get 7 months rent free. I don’t think that helps much!
The lawful sequence for accepting money at the start of a tenancy is therefore:
1. Take an optional holding deposit (max 1 week)
2. Complete checks
3. Take the tenancy/security deposit (up to the cap), less the holding deposit if there is one
4. “Enter into” the tenancy
5. Require the first month’s rent in the “permitted pre‑tenancy period” before possession
The only thing that has changed is the amount of the landlord’s loss if the tenant never pays the rent.
Member Since November 2022 - Comments: 2
2:19 PM, 29th December 2025, About 3 months ago
Can you ask for the first month’s rent before signing the tenancy agreement?
I think everything can be done in one face-to-face meeting: here is the agreement; please pay the first month’s rent, and then we both sign on the dotted line.
Member Since December 2025 - Comments: 31
3:09 PM, 29th December 2025, About 3 months ago
Reply to the comment left by Optimistic Landlord at 29/12/2025 – 14:19
No. There may be only one minute between payment of the rent and “signing on the dotted line” but that minute puts you in breach of the Tenant Fees Act as amended.
Member Since December 2025 - Comments: 31
3:10 PM, 29th December 2025, About 3 months ago
Reply to the comment left by DPT at 29/12/2025 – 11:25
DPT – Your excellent comment addresses two crucial questions:
The first is, when does the tenancy come into existence? Is it when the tenancy is granted or does it arise only when the tenant takes possession?
To answer this we have to consider terminology. Under general land law, a tenancy is created on grant, which occurs when the agreement or deed is completed by signing (and where relevant, witnessing), dating and delivery, or, in modern contract form, at the point the parties have concluded a binding agreement for a term at a rent. RRA2025 does not use “grant” but speaks of tenancies being “entered into”, which is plainly intended to capture the same moment in time: the point at which there is a concluded tenancy agreement, even though occupation has not started.
However S.1 Housing Act 1988 continues to make the tenant’s occupation as their only or main residence a condition for an Assured Tenancy to exist. So if the tenant never occupies the contract can still be a valid tenancy in land‑law terms but it does not acquire assured status until the “only or principal home” condition is met. But is this the case if the tenant is not occupying because the landlord has refused to hand over the keys? I do not think so because there is at least a strong argument that the landlord should not be able to rely on their own breach (refusing to give possession) to deny that an assured tenancy has arisen or to strip the tenant of the protections that would otherwise flow once they are allowed in. Putting this in plain language, the fact that the tenant is in breach by not paying the first month’s rent probably does not entitle the landlord to also be in breach.
What about David Smith’s suggestion of including a provision that prevents the tenancy coming into existence after grant if the first rent payment is not made? The effect would be to make the very existence of the tenancy conditional on pre‑payment after signature and this looks hard to reconcile with the RRA2025 concept of entering into a tenancy. If the agreement is already “entered into”, treating it as never having taken effect because the initial rent was not paid is likely to be seen as an evasion of the rent‑timing rules rather than a true condition precedent. I do not think any judge would accept it.
The second question is whether the act of refusing to hand over the keys (because rent has not been paid) is as serious as I suggested. I can make a case that it may not be an offence under part 1 S.1 of the Protection from Eviction Act 1977 because the protections only apply to “a person occupying the premises as a residence….” That definition clearly presupposes factual occupation as a residence and cannot be satisfied by someone who merely has a contractual right to possession but has never gone into occupation. But the enforcement of the new regime will be by local Housing Authorities who we know have a statutory duty and real financial incentives to enforce breaches by landlords (not by tenants!) and the government guidance states that £35,000 as the starting point for civil penalties for unlawful eviction and harassment under (s1(2) and (3) of the 1977 Act. Perhaps such a penalty would not be upheld on Appeal. But we won’t know until there are actual cases, and I would not be willing to be the first to deal with this.
Member Since September 2018 - Comments: 3508 - Articles: 5
3:14 PM, 29th December 2025, About 3 months ago
Reply to the comment left by Optimistic Landlord at 29/12/2025 – 14:19
no that’s the ‘point’ of the RRA.
You cant ask or demand any rent in advance of the tenancy start date UNLESS it is within the period where the contract has been signed by all parties and the actual contract start date.
If you agree to meet T on 5 May to sign contract, when start date is 10 May, you can ask T to pay one months rent on 5,6,7,8,9th or even on the 10th.
If they do this before or on 10th then hand them the keys as they have done what was agreed.
If they don’t pay the first months rent by 10th there is not a lot you can do – you CANNOT legally withhold giving them the keys even though no rent has been paid.
NB The ONLY RRA exemption to all this, is if the council pay the first months rent for the tenant directly to you. This can be made directly to the LL before the TA is signed by the actual T.
Member Since July 2013 - Comments: 754
3:59 PM, 29th December 2025, About 3 months ago
With a student property, as cited here, the ‘meet, sign, take rent payment’ model (irrespective of sequence of events), likely falls apart if a joint and several agreement is to be signed.
In my experience, very seldom do all tenants show up on the first day, leaving just one or two representatives to talk for them all. I would rather herd cats than manage student tenancies (thankfully I don’t any more), as few recognise the importance of the contract they are entering into or the need to observe certain legal protocols. I fear a number of LLs could unwittingly come to grief. Guarantors are an absolute must, if only to communicate in advance the responsibilities that they and their offspring will need to meet.