Tag Archives: Rent Arrears

Tenant not paying rent? Here’s what to do.

true-property-tenant-not-paying-rent-heres-what-to-do

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.

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How to deal with late rent payers

True Property - how to deal with late payers

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.

First Notice

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.

Ongoing Issues

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.

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?