Have you ever come across a situation where your tenant hasn’t paid the rent? It’s one of every landlord’s biggest fears – a tenant who can’t pay the rent. The good news is legislation is in place to protect you. Phew.
Rent arrears are, undoubtedly, stressful, and expensive to deal with. Whether the tenant paid a portion of the rent or not paid at all, it’s essential to deal with the situation as soon as possible.
MY TENANT IS IN ARREARS, WHAT CAN I DO?
With the right approach, landlords can make sure the debt recovery process is smooth without any hassle. No matter the reason, landlords have several legal obligations and cannot simply evict the tenant. But the good news is legislation is in place to protect the landlords.
In this article, you’ll get to know about the arrears’ rules. I’m not sure of other states but here on the Sunshine Coast in Queensland Australia below you’ll read all about the legislation.
Be it about the legislation or eviction rules, after reading this article; you can take necessary actions against the tenants.
But first, let’s clear up some myths.
TENANTS NEED TO PAY RENT 2 WEEKS IN ADVANCE. WELL, IT DEPENDS.
Many people think that tenants need to pay 2 weeks’ rent in advance. It really comes down to what’s been written in the General Tenancy Agreement.
Page 2 Item 7 has the lease amount and if this is weekly, fortnightly or monthly, Item 8 refers to what day of the week the rent needs to be paid and how often.
What’s important to realise if this indicates fortnightly it does not suggest in advance.
In the standard condition, item 9 refers specifically to how a tenant may be asked to pay rent in advance. Ideally, this should be documented in the GTA so it’s clear. Landlords or property managers can request a tenant to pay up to 1 month in advance. Interestingly if there was ever an issue Qcat would also consider what’s being asked is considered fair. With that in mind asking a tenant to pay 2 weeks in advance seems fair to us.
EVICT TENANTS FOR BEING LATE WITH THEIR RENT
Sure we can evict tenants. But it is not as simple as “I want them out”. We need to follow a process based on the legislation, and you are about to find out how shockingly behind a devious tenant can be if they choose to be late. Tenants need to be about 2 weeks behind before we can evict them and even then we need to give them 7 days rent arrears notice. So the best idea is to never get to this stage by working with the tenants. To ensure they realise it’s unacceptable, to be behind in rent, and there are consequences too. If you want to evict the tenant, you must give your tenants the correct late rent notice and time frames starting with a Notice to Remedy Breach and then a Notice To Leave. Also, you cannot lock your tenants out without court or tribunal order. It is illegal, and you can be fined up to $22,000. You can read more about this here on the RTA site.
This pocket guide for tenants will also provide them with rent in arrears help.
OUR HANDS ARE TIED WHEN RENT IS LATE BY 1 TO 7 DAYS
When a tenant is late by 1 to 7 days, there is not much you can do other than call, SMS, or email for requesting the payment. If they choose to ignore you, they can. Our agency will send SMS’s and emails on the third and fifth days. However, on day 4 & 7, our property manager calls. Since we have zero tolerance for rental arrears, our agency strives to solve these cases instantly and efficiently. If you are one of our clients and you’d prefer we call the tenants daily from day 1 to 7, we can do that too.
If you self manage and have a tenant consistently in arrears, use the legislation and breach notices to get them one track or engage a property manager who can handle the property and tenant for you.
So as you can see up to 7 days in arrears, there is not much we can do. But after the completion of 7 days, we can start taking some serious action.
DAY 8
If a tenant’s rent is 8 days in arrears, this is the day we can take some serious action. It’s called a Notice to Remedy Breach.
But here’s the thing. While it is an official legal breach notice, they still have seven days to pay the rent up to date. Although the notice to remedy breach is not a formal notice for eviction, it lets the tenants know that they have breached their agreement, and there is a need for a prompt solution.
So if they choose to wait seven days, then it can be as much as 14 days they are in rent arrears. Of course, we don’t just send them a breach and cross our fingers. In fact, we are in regular contact with them via phone & email to get the matter sorted as fast as possible before things get out of hand.
Usually, at this stage, the tenant has reasons for the delay and inability to pay the rent. These reasons vary, and while I’m sure they are all legitimate, tenants still have a legal obligation to pay their rent before or on the due date.
NOTICE TO REMEDY BREACH (FORM 11)
Well, Notice Remedy Breach is a nightmare for tenants, and no tenant wants to get one of these as this will be on their record. If they move and look for a house somewhere else, and the next property manager does a reference check, he/she is going to find out that the tenants have been served a breach. If a tenant is a serial offender of being eight days behind in rent, then they will have multiple breach notices on their file, making it even harder for them to secure a property in the future.
Multiple breach notices are also a reason to evict a tenant. If a tenant has several of these, then yes, they can be asked to leave the property even if they have paid their rent up to date.
NOT SENDING A NOTICE TO REMEDY BREACH ON DAY 8
No matter what, our agency has a policy of sending tenants the Notice to Remedy Breach on day 8. After all, they are already eight days late in paying the rent, not 3 or 5.
However, if you get anything wrong with sending this notice, then QCat could reject your application for evicting the tenant. For a strong case, make sure your notice includes the following:
- The address of the property.
- The date by which you want the tenants to vacate the property.
- The reason for the notice (for e.g., late payment of rent).
If the tenants enter into a repayment agreement plan with landlords, they will stay at the premises.
You can issue this notice by email, post, or give it to the tenant by hand. Also, make sure you take notes and keep copies of everything if the tenant wishes to take the case to court.
STILL IN ARREARS 7 DAYS AFTER SENDING THE NOTICE TO REMEDY THE BREACH
It is important to understand that if on the eighth day the breach is not sent and it’s sent on day ten instead, you need to wait seven days after the breach was issued to take the next step.
What is that step? It’s a Form 12 notice to leave.
Yes, it sounds so nasty, telling a tenant we are evicting them, and they have 7 days to vacate. What you need to realise is that if you send this, you should not back out. If you back out, they have called your bluff and may do it again in the future.
I’ve had a landlord just like this. They really liked the tenant, and he would always get behind on paying the rent. We would issue the breach, seven days would pass, and when the time comes to issue a notice to leave, the landlord backs out. They just decide not to issue the notice to leave. It happened so many times that the RTA said that now a notice to leave may not stand up in QCat because we bluffed the tenant so many times.
TIME FRAMES FOR AN EVICTION
If you follow this process, the tenant will be out of your home within three weeks, but you will be three weeks of no rent. Luckily, we are holding a four weeks bond, so you should be covered. With a week to spare for a bond clean ready for the next tenant.
LANDLORD INSURANCE
The above is a great reason to have landlord insurance. If the bond does not cover rental arrears, a good landlord insurer will. Very few of our clients need to use landlord insurance, but the ones that have had to have certainly been glad they had it.
Landlord insurance will protect you against arrears, thefts, and damages. However, keep in mind that you cannot claim the insurance until the tenants have vacated the premises.
So, as soon as any situation occurs, make sure to contact your insurer. Also, you should have copies of breach notices, photos, and inspection reports to support your claim.
WHAT IF THE TENANT DOESN’T MOVE OUT?
If the tenant doesn’t move out, landlords can lodge an urgent application with QCAT to end the tenancy. However, this must be completed within 14 days of issuing the “Notice to Leave.”
Also, you must be able to prove the violation of the terms of terminating the agreement. If the request is accepted, QCAT will issue an order to terminate the tenancy and issue a warrant for possession.
After the issuance of the warrant for possession and termination order, you have every right to change the locks of the rented property. If they are not at home, you are, however, required to put their stuff in storage.
If you have a warrant for possession, a Sheriff or a court’s officer can evict the tenant as rent arrears help. If necessary, he can remove the tenant forcefully.
You are authorised to attend the eviction. To monitor any damage that the tenant may have caused to the property during his eviction. Make sure you make a formal final inspection of the property and take lots of photos of the property. All this evidence can be used to recover the necessary repairs if the bond is not sufficient to cover these costs.
HOW TO REDUCE THE RISKS OF TENANT IN ARREARS?
When it comes to tenant rent arrears qld, the best thing to do is to approve a good tenant by having a solid tenant application and approval process.
Carefully check potential tenants on TICA, past property managers, employees, personal references, Facebook, and Google. Do this with thoroughness and take your time to make sure you have the right tenant in your property.
Some real estate agents reference checks are not comprehensive enough, and they just want to place anyone. So ensure they have seen the tenants ledger, contacted past property managers, spoken to their employer, etc. Insist of you making the final decision or switch to a new real estate agent.
When selecting tenants, a good agent should let you know that the tenants they have interviewed are not reliable and that they should keep looking. In the long run, it is worth making the right decision for the tenant.
CONCLUSION
If you are ever in a situation of rent arrears with your tenants, just stay calm and collected even if they are late for the rent payment. Acting in haste will not help for rent arrears as it will further heat the situation and escalate the matter.
Even if you have verified the track record of tenants, yet there might be some situations that tenants not paying rent. Maybe they still fall on difficult times while paying the rent, some of which could be genuine. So, take some time before taking any action to resolve the matter on favorable terms.
We are not saying that legal action is not important. Still, sometimes it is essential to proceed carefully and follow the appropriate legal procedure if you want to serve an eviction notice for rent arrears.
Lastly, if you have any queries regarding the legal process, get in touch with us before taking any legal action.
