When you go to a job every week, you can expect to get paid. And the same applies when you rent our property out.
When you own a rental property, a tenant not paying rent is one of the most severe issues you may face. It is important that you deal with it as early as possible.
Give them the benefit of the doubt
If your tenant is a few days late in paying their rent, send them a reminder letter of the overdue payment. Maybe they had personal issues and forgot to pay that particular day. Give them the benefit of the doubt that there is a genuine reason. Call them to talk about it rather than jumping to conclusions. Set up a process moving forward that they need to call you if they are going to be late paying. Set clearly in your contract what will happen i.e. a late charge so everyone is on the same a page. Use your discretion of what you will allow and not allow. Maybe you will let it occasionally go if the tenants phone you in advance.
Take action if it happens often
If the tenant is late paying all the time, you might want to change the method of payment to one that provides more certainty, such as a direct debit.
Your tenancy agreement outlines that the tenant will pay rent on time. If they don’t, you can apply to the Victorian Civil and Administrative Tribunal (VCAT) for an order to make sure the tenant complies with the terms of the agreement. It’s best to do this when a tenant is often late paying their rent. However, it is important to note that such a request cannot result in the termination of the tenancy if the non–payment of rent continues.
Final step: Eviction
If the tenant is more than 14 days behind with the rent, you can serve them with a termination notice. This will give them 14 days to leave the property. Your notice needs to be in writing and properly addressed to the tenant. You need to state why they have to go and by when. Also, mention that they won’t have to leave if they pay the outstanding rent or set up a repayment plan.
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 of 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 of the notice unless you ask for an extension.
By enlisting the services of a property management agency, you can save yourself the unpleasant job of dealing with tenants in arrears.