When you own a rental property, a tenant not paying rent is one of the more serious issues you may face. It is important that you deal with it as early as possible.
When the tenant is a few days late in paying the rent it is good practice to send them a reminder letter of the overdue payment. They may have just forgotten to pay the rent on that particular day. If you have a phone number for the tenant, giving them a call may also be a good idea.
If the tenant is regularly late paying the rent you may wish to discuss with them changing the method of payment to one which provides more certainty, such as a direct debit arrangement.
One of the terms of the tenancy agreement is that the tenant agrees to pay rent on time. If they are not doing this, you can apply to the Victorian Civil and Administrative Tribunal (VCAT) for an order that ensures the tenant comply with the terms of the agreement. This type of application is best suited where a tenant is frequently or regularly a few days late with the rent. However, it is important to note that such an application cannot result in the termination of the tenancy if the non–payment of rent continues.
Serving a termination notice
If the tenant falls more than 14 days behind with the rent you can serve them with a termination notice, giving them 14 days to vacate the property. The notice must:
- be in writing
- be signed and dated by you or your agent
- be properly addressed to the tenant
- give the day on or by which the tenant is requested to vacate
- state that the grounds or reason for giving the notice is because the tenant is more than 14 days behind with the rent
- include a statement informing the tenant that they do not have to vacate if the tenant pays all the rent owing or enters into, and fully complies with, a repayment plan agreed with the landlord.
Applying to the Tribunal
You can apply to the Tribunal at the same time as or after serving the notice to the tenant or you can wait until after the termination date in your notice before applying to the Tribunal. This way you will know if you need a hearing because the tenant has not moved out or has not paid the rent owed. However, this could add up to 2 weeks before obtaining a hearing date compared to applying at the same time as giving notice. The application cannot be made more than 30 days after the termination date in the notice unless you apply for and the Tribunal grants you an extension.
By enlisting the services of a property management agency, you can save yourself the unpleasant job of dealing with tenants in arrears.