What should you do if your tenant doesn’t pay rent

What to do if your tenant doesn't payChristmas and holiday season is always going to be a tough time for some renters. Buying Christmas presents and taking their family away on holiday, money will be tight and something has to give. Most tenants would have budgeted for this time and will still be able to pay their rent, but there will always be some that may fall behind.

What can you do if this happens to you? Regardless of your tenant’s personal problems, you still have a right to get your rent on time. There are a few things to consider:

Is this a one-off occurrence?

If your tenants are usually great at paying but slipped up this once, it may be worth it to give them the benefit of the doubt. If they have come to you and explained the situation (rather than you finding out when the money doesn’t appear in your account) you may be able to work something out with them and agree on a payment plan or deadline of when they will get the money to you.

Does this happen on a regular basis?

If this happens all the time without good reasons you may want to consider taking further action. If the tenant owes at least 14 days rent you can give them a 14-day Notice to Vacate. This is the last resort after you have tried everything else. It is always best to call your tenant first and see if you can come to an agreement and if not, explain to them that further action will be taken.

According to Consumer Affairs Victoria the Notice to Vacate must:

  • be sent to the tenant at the premises by registered post or hand delivered (‘hand delivered’ means giving it personally to the tenant or leaving it with a person apparently over the age of 16 and apparently residing or employed at the tenant’s usual or last known home or business address).
  • be addressed to the tenant.
  • give a specific reason or state that no reason is given in the case of a 120-day notice.
  • be signed by the landlord (or their agent).
  • allow the correct amount of time to give the notice.
  • give the date for the tenant to leave.

How would you deal with a tenant that didn’t pay rent over Christmas? Would you give them the benefit of the doubt?

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4 thoughts on “What should you do if your tenant doesn’t pay rent

  1. Unfortunately I had to do this with a tenant that paid rent 2-3 weeks late every month for 4 months straight and he always owed utilities. I offered to terminate his contract without fees if he moved by said date and if he paid all of his utilities. If he didn’t move he would get an Eviction and Fees. Needless to say, he moved out on his own. Always keep records of your tenants and make sure everyone that you rent to has something to lose such as a clean record (no evictions on record).

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      1. I still learn a lot through mistakes because I’m still fairly new at managing a property. I made even the simplest mistakes: such as not having a contract. Another big mistake was not restarting who could live on the property. this is important because some renters think its okay to let a friend move in without telling the landlord. That friend then decides to stay and its a pain for the landlord to get them to move out. So add to your contract to disallow this without permission.

        A more recent mistake was not having a deposit large enough that covers all of your risks. At first I was not requiring a deposit and that was a huge mistake because once they move out you it’s hard to get them to pay. So then I started charging a $300 deposit and that was a huge mistake because they ended up leaving the house with $200 utilities unpaid and the rent only half paid. So now I charge 2 month’s rent ($1400 in my case). My county doesn’t let me put the utilities, other than the electricity, under their name, only mine. So make sure to keep on top of utilities and add fees for it if they don’t pay it in time.

        A lot of mistakes that I made that I will never make again. I could almost write a book on it.

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      2. Thank you so much for sharing your experience, these tips are fantastic, and often when you are starting out you do end up learning the hard way! I couldn’t agree more with your comments about contracts. You are right, if you spell everything out in the contract (and go through it very clearly with your tenants) then it is a lot harder for them to claim ignorance.
        Maybe you should consider writing a book, a “New landlord’s Handbook” would probably be very successful.

        I hope you have a wonderful holiday season.

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