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 2025 - Comments: 31
3:05 PM, 13th January 2026, About 3 months ago
Reply to the comment left by DavidM at 13/01/2026 – 15:01
David – please see my reply to Ian.
Thank you both for a very interesting debate.
Member Since March 2018 - Comments: 182
3:35 PM, 13th January 2026, About 3 months ago
Angela Rayner wanted this Act and ignored all the concerns by landlords, perhaps seeing them as biased and exaggerated. The real world may be a shock to her.
Member Since December 2025 - Comments: 49
3:40 PM, 13th January 2026, About 3 months ago
Reply to the comment left by Michael Crofts at 13/01/2026 – 15:05
Michael
But won’t even the 1st month be covered by RGi?
Govt position was i think LLs can pursue rent arrears just like now
Basically instead of one rare unfair scenario (rogue landlords who pocket initial rent and disappear, leaving tenants to sue in small claims court if they can find them and have the knowhow), we have a different rare unfair scenario (rogue tenants who don’t pay even 1st month rent get keys and live rent free and LLs pursue for rent arrears). Both are intrinsically unfair situations. Current market solution is eg Openrent holding on to 1st month rent for 10 days to protect tenants and make sure they get keys, or tenants dealing via letting agents. Problem is those bad LLs who deal with tenants direct with no ‘professional’ involvement
Problem with first is relatively poor tenants out of pocket and even homeless. Problem with second is cost of rent gtee insurance or pursuing rent arrears. It’s easy to see why govt chose second over first
Tragedy is that the sort of tenants who pay a LL upfront and don’t get keys because LL has disappeared are likely dealing with the cash in hand verbal agreement merchant’s who will disappear just as quickly as before and who maybe didn’t even own the property in the first place (if they own it they are easier to find(. The folk advertising to 1st time renters or foreign students arriving for 1st time. So the sledgehammer won’t even crack the nut. It will just give an extra months stress and grievance to a hopefully very small number of LLs who are unlucky enough to have trusted at the wrong tenant
Member Since July 2013 - Comments: 2002 - Articles: 21
3:57 PM, 13th January 2026, About 3 months ago
Reply to the comment left by DavidM at 13/01/2026 – 15:01
Hi David
I am a lawyer but not a litigator and as I say, my proposal may not find favour with the courts. The warranty and representation is indeed part of the tenancy contract. The tenant still owes the rent, even without my clause. @Michael Crofts, my proposal does not get round (nor purport to get round) the problem of the tenant not handing over the first month’s rent. I am not “swerving” the RRA. What my wording tries to do is give the landlord leverage with a rogue tenant.
The threat of a criminal conviction will not occur to most tenants so being faced with that possibility may cause the tenant to reconsider his disgraceful conduct.
Member Since December 2025 - Comments: 49
4:05 PM, 13th January 2026, About 3 months ago
Reply to the comment left by Peter G at 13/01/2026 – 15:35
Peter G
The Act is (apart from Awaabs law) largely the same as the version put forward by the previous Conservative government. Including ending fixed term tenancies and abolishing s21.
So all same concerns ignored by conservatives, Theresa May committed to s21 abolition in 2019
Best
Member Since December 2025 - Comments: 49
4:28 PM, 13th January 2026, About 3 months ago
Reply to the comment left by Ian Narbeth at 13/01/2026 – 15:57
Ian
but who’s going to prosecute a hard up hard done by.tenant because they fraudulently entered into a tenancy agreement with a landlord. They will say they were desperate and have a right to housing or didn’t understand what they were signing.
Will anyone brazen enough to demand keys to a property for no payment at all or just 1 week holding deposit really worry about such a small risk. At most they’d get a fine and a payment plan which they also wouldn’t pay pleading poverty.
Why would that deter them rather than say an agreement that if they don’t pay, then their name and details of non payment will be shared on social media and in the local and national media (you could justify this as part of your business as a landlord to promote tenants behaving in a good way, just as you would share for referencing purposes).
Member Since March 2018 - Comments: 182
6:41 PM, 13th January 2026, About 3 months ago
Thanks. So the accusations of a “uniparty” are justified. But Labour has denied themselves the opportunity to remedy the flaws in the Conservative proposal, and made things far worse for both landlords and tenants – rents have rocketed for tenants, landlords earnings have plummeted, and many landlords have sold up, disillusioned, making renting even harder for tenants.
Member Since December 2025 - Comments: 49
8:32 PM, 13th January 2026, About 3 months ago
Reply to the comment left by Peter G at 13/01/2026 – 18:41
Peter G
Large number of tenants would have sold up anyway whichever party introduced the legislation and especially s21
Why have rents soared – this is a mix of long term factors ( like decades of govts not facilitating building enough new housing so hard to get deposit to buy, changes in household mix) and short term pressures (war in Ukraine etc pushing up energy prices, tariffs and instability due to trump and brexit, record legal immigration for work and study in 2022 and 2023 under Rishi – since reduced- and higher mortgage rates – two year fixed rates at almost 7% in July 2023 under the conservatives). The highest rent increases were 9.2% in March 2024 again before the current government
Earnings have been squeezed by higher mortgage costs in recent years and relatively high inflation for other costs. For those renting to poorer tenants the local housing allowance and benefit levels haven’t kept pace with inflation.
So while I agree Labour has done little to fix the market a lot of the problems date back longer – both to recent Conservative and coalition govts and from long term failures on housing supply by both labour and Conservatives
Member Since July 2013 - Comments: 2002 - Articles: 21
3:05 PM, 15th January 2026, About 3 months ago
Reply to the comment left by DavidM at 13/01/2026″ – 16:05
The RRA is worse than the Renters (Reform) Bill. It includes:
• a requirement for 3 months’ arrears before a landlord can start s8 proceedings;
• the requirement to state a rent in ads and the prohibition of “rental bidding”,;
• the prohibition of a tenant more than one month’s rent in advance;
• the requirement that the tenancy be entered into before any rent can be accepted;
• the prohibition, after obtaining possession on the grounds of wanting to sell, against reletting for 12 months;
• not back-dating rent increases meaning that it is every tenant’s interest to object to every rent increase, however small, to delay implementation.
There are probably others. This Act is nasty and it sets landlords up for a fall, with Draconian penalties for what is standard practice in most areas of business.
Member Since August 2016 - Comments: 1190
3:27 PM, 15th January 2026, About 3 months ago
Reply to the comment left by Ian Narbeth at 15/01/2026 – 15:05
Well said Ian 👍