How to set up a rent payment plan with a tenant

Published 4 October 2026 · Landlords and tenants

When a tenant falls behind, a payment plan lets them catch up in instalments while they keep paying the regular rent. For a landlord it is usually quicker and cheaper than an eviction; for a tenant it keeps their home. It only works if the plan is realistic and written down.

When a payment plan makes sense

A plan works best after a temporary setback, such as a job loss, illness or reduced hours, when the tenant now has enough income to pay the current rent plus something extra. If the tenant cannot cover even the current rent, a plan only delays the problem; rental assistance or an agreed move-out may be better options.

Work out an affordable schedule

1. Agree the exact amount owed up to a set date, itemised: rent, late fees and any other charges.
2. Look at what the tenant can pay on top of the regular rent each month.
3. Spread the balance over enough instalments to make that possible, often three to six months.
4. Set instalment dates that match the tenant's paydays.

For example, $1,800 of past-due rent could be repaid at $300 a month for six months, on top of the regular rent. The free late payment interest calculator shows what the overdue amount has cost if your lease charges interest.

What to put in writing

1. The landlord, the tenant, the property and the lease.
2. The past-due amount and the period it covers.
3. Each instalment date and amount.
4. That the regular rent stays due on time during the plan.
5. How payments are made, and that the tenant may pay off the balance early.
6. Whether late fees already charged are waived if the plan is kept.
7. What happens if a payment is missed: any grace period, and the notice the landlord will give.
8. That the landlord will not evict for the past-due amount while the plan is kept.
9. That the lease otherwise stays the same, and both signatures.

Late fees during the plan

Offering to waive late fees already charged if the tenant completes the plan gives them a reason to keep to it. Do not charge new late fees on instalments paid on time, and check any local limits on late fees.

Eviction rules and partial payments

In some places, accepting part of the rent can affect a landlord's right to continue an eviction that has already started, and some cities and states require particular notices or offer mediation first. If an eviction case has been filed, the plan may need to be agreed through the court. Check local rules before relying on the plan.

Rental assistance

Ask whether local emergency rental assistance is available. Some programmes pay part of the arrears straight to the landlord and set their own conditions, which the plan can then reflect.

Keep records

Give a receipt for every payment, showing what it was for: regular rent or an instalment. A short note of each payment against the plan avoids arguments about what is still owed.

Free templates

The free rent payment plan agreement template sets out the past-due amount, each instalment, an optional late-fee waiver and what happens if a payment is missed. Use the rent receipt for each payment, and the late rent notice if rent falls behind again.

General information, not legal advice. Rental and eviction law differs between countries, states and cities.

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