Arrears

Modified on Fri, 4 Oct at 2:18 PM


General Information


Typically speaking, dealing with arrears is one of the worst jobs in Property Management. It is never nice for an agent or PM to have to speak with a tenant about why they have fallen behind in rent. Likewise, most tenants don't like speaking about the fact they are not in a financial position (no matter the reason) to pay the rent for the home they live in.


Some things to consider when dealing with rent arrears:


  • Stepping outside of the noted timeframes and notice periods in your geographical location could jeopordise your owners ability to make a claim on their Landlord Insurance down the track (if the tenancy turned sour and there is a debt owed at the end of it). If the Landlord was to make a claim on their insurance and the claim was not approved on the basis that notices were not issued on time or an action was not carried out by the agent when it should have been, the Landlord may have rise to a claim against the agent for any financial loss.
  • Tenants should be reminded that they need to do everything they can to keep their rent up to date at all times. This will assist them in securing a new rental property down the track and can also have an impact on whether or not a financial institution or lender feels they are fit for a loan application (when purchasing a home or looking at a new car they will potentially ask for payment records to show good character and timeliness or rental payments).
  • An agent and property manager should always ensure the tenant is made aware that if they cannot make their normal rental payment throughout the tenancy, they should reach out and discuss this straight away.
  • Where a tenant is unable to pay their rent, an agent should encourage them to pay as much as possible, even if its not the full payment. It is far easier to catch up on a part payment than a full payment.
  • At the point that the arrears process may trigger an "end of tenancy" an agent should always ensure they have the owners written approval to issue such a notice. For example, in Queensland if a tenant doesn't remedy the initial breach that is issued and pay their rent up to date, the next step is issuing what is known as a Notice to Leave. This essentially can end the tenancy as the agent is asking the tenant to leave the property, having not remedied the breach.
  • Landlords should also be educated that if they were to allow leniency at a time that the tenant falls behind in rent (e.g. not issue a breach notice when they have the opportunity to) this could also jeopordise their chances of a successful insurance claim down the track. It could also impact their ability to end the tenancy and have the Tribunal order in their favour if the matter gets out of hand and is not addressed. We have witnessed cases that the Tribunal has allowed the tenant to stay on and initiated a payment plan instead of evicting them. The grounds were thta the owner had allowed a number of "exceptions" in the past and didn't see why they now want to get them out for failure to pay rent when it had been overlooked in the past.


Quick Reference - Time Frames - All States


State

Legislative / Statutory Body

When to issue a breach notice

When to issue a termination notice (or follow up after breach)

Tribunal 

 

 

 

 

 

QLD

RTA

www.rta.qld.gov.au

 

On day 8

Tenants must be 7 clear days in arrears before any notice can be issued 

If tenant has not remedied the breach (paid the amount owing at the time that the Notice was issued - not the additional week that has accumulated) then you have the ability to issue a Form 12 - Notice to Leave (subject to agent and property owner prior written approval).

This would be on the grounds of “failure to remedy breach”

Under these grounds the notice period for the Notice to Leave is 7 days

If a tenant chooses to hand keys in on or before the expiry of the Notice to Leave, the tenancy has effectively come to an end on the expiry date of the notice. No further rent would be owing after the expiry date under these terms.

Following expiry of the NTL if the tenant has not returned possession of the property to the agent / owner then there is an ability to apply to QCAT for a Termination Order under the grounds of “Failure to leave”.

Please note: the application at this point is not to chase rent arrears or any potential debt incurred with the vacating and tenancy process. The RTRA Act doesn’t allow for this to happen at this stage of the process.

It is important to note that an application to QCAT must be done within 14 days of the Notice to Leave expiring.

NSW

Office of Fair Trading

www.fairtrading.nsw.gov.au 

No statutory timeframe or form at this point.

Recommended to email tenant when they miss a payment.

From this email a 14 day window of time must be provided to allow tenants to rectify arrears 

Non-payment Termination Notice

If a tenant does not pay their rent arrears within the notice period noted the left of this column then you have the ability to issue a Non-payment Termination Notice (subject to agent and property owner prior written approval).

There is not a statutory form for this however a template can be found here: 

https://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0006/369978/Notice-to-terminate-tenancy-agreement-landlord-agent.pdf

Tenant is provided a 14 day period to vacate and end the tenancy.

Apply to NSW Fair Trading for termination of failure to vacate 

 

 

VIC

Consumer Affairs Victoria

Renting 

No breach notice required under this state legislation

The tenant must be at least 14 days in arrears before a Notice to Vacate can be issued.

Please note: If the tenant pays their arrears before the expiry date of the Notice to Vacate the notice is considered revoked.

This notice must be a minimum of 14 days notice period.

Should the tenant repeatedly be issued Notice to Vacate and rectify the arrears, there is a provision for the Agent / Lessor to apply straight to Tribunal if 3 Notice to Vacates have been issued within a 12 month period (that the tenant has rectified their rent for). 

Application to VCAT is made simultaneously as the Termination Notice.

SA

Consumer & Business Services www.sa.gov.au 

Rent must be at least 14 clear days in arrears before an Breach Notice can be issued

https://www.sa.gov.au/__data/assets/pdf_file/0005/18446/Notice_to_tenant_to_remedy_breach_of_agreement.pdf

The notice period required for this notice is a minimum of 7 days

Should the tenant not rectify the breach and pay their arrears by the expiry date of the notice you have the ability to apply to SACAT for a termination.

Please note: the tenant could also hand possession back and the tenancy would be at an end on the expiry date of the notice.

Please visit the link to the left for further information and advice on how to claim possession

Apply to apply to SACAT if failure to vacate for non payment 

WA

www.commerce.wa.gov.au

 

Residential Tenancies Act 1997

https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc_32252.pdf/$FILE/Residential Tenancies Act 1987 - [06-c0-00].pdf?OpenElement

 

https://www.commerce.wa.gov.au/consumer-protection/breaches-tenancy-agreement 

 

Tenant can be in arrears by only 1 day and the lessor / agent can issue a breach notice (see link above).

 

Notice period for this notice is 14 days

If the tenant does not rectify their rent arrears under the Remedy Breach provisions a Notice to end the tenancy can be given.

This notice must have a notice period of at least 7 days for the tenant to return possession of the property.

 

Notice of termination must be used - Notice of termination - Form 1C  

If tenant fails to leave by expiry for the Form 1C agent / lessor can apply to Court to end tenancy

TAS

View - Tasmanian Legislation Online 

 

Tenancy agreements / leases 

No breach notice required under this state legislation

A notice of termination can be issued if the tenant falls behind in their rent. The notice is considered revoked should the tenant rectify the arrears issue within the timeframe of 14 days (the notice period).

Magistrates Court : Rental disputes: Information for property owners 

If tenant does not rectify rent and does not vacate the property by the expiry date of the notice of termination you can apply to Court for a “Vacant Possession” order to end the tenancy.

If you don’t apply within 28 days of the Notice to Vacate taking effect, the notice lapses and you must start the eviction / arrears process again.

NT

 

 

 

 

ACT

 

 

 

 


Western Australia - Time frames and notice periods break down


Day 3

Auto reminder through PT

Day 5

Auto reminder through PT

Day 10

HO to contact Agent & seek written permission to issue Form 21 on Day 15 if rent not remedied

Day 13

Auto reminder through PT

Day 15

Form 21 - Breach Notice to be issued (agent CC'd in on tenant email) - 14 days notice

Day 25

HO to contact Agent & seek written permission to issue Form 1C on Day 30 if rent not remedied

Day 29

Expiry of Form 21

Day 30

Form 1C issued - 7 days notice


Victoria - Time frames and notice periods break down


Day 3

Auto reminder through PT

Day 5

Auto reminder through PT

Day 10

HO to contact Agent & seek written permission to issue Termination Notice (14 days notice period)

Day 13

Auto reminder through PT

Day 15

Issue Termination Notice

Day 25

HO to contact Agent & seek written permission to apply to VCAT

Day 29

If rent has been paid - seek owner permission to withdraw Termination Notice

Day 30

Application to VCAT to Termination of tenancy if rent remains unpaid and tenant has not vacated


Tasmania - Time frames and notice periods break down


Day 3

Auto reminder through PT

Day 5

Auto reminder through PT

Day 7

HO to contact Agent & seek written permission to issue Termination Notice (14 days notice period)

Day 8

Issue Termination Notice

Day 13

Auto reminder through PT

Day 19

If rent has been paid - seek owner permission to withdraw Termination Notice

Day 22

Application to TCAT to Termination of tenancy if rent remains unpaid and tenant has not vacated


South Australia - Time frames and notice periods break down


Day 3

Auto reminder through PT

Day 5

Auto reminder through PT

Day 13

HO to contact Agent & seek written permission to issue Form 2 on Day 15

Day 13

Auto reminder through PT

Day 15

Form 2 issued (7 day notice period)

Day 18

HO to contact Agent & seek written permission to apply to Tribunal

Day 22

Form 2 expires

Day 23

Application to SACAT to Termination of tenancy


New South Wales - Time frames and notice periods breakdown



Day 3

Auto reminder through PT

Day 5

Auto reminder through PT

Day 7

HO to contact Agent & seek written permission to issue Termination Notice (14 days notice period)

Day 8

Issue Termination Notice

Day 13

Auto reminder through PT

Day 19

If rent has been paid - seek owner permission to withdraw Termination Notice

Day 22

Application to NCAT to Termination of tenancy if rent remains unpaid and tenant has not vacated


Queensland - Time frames and notice periods breakdown


Day 3

Auto reminder through PT

Day 5

Auto reminder through PT

Day 8

F11 to be issued (agent CC'd in on tenant email)

Day 13

HO to contact Agent & seek written permission to issue F12 on Day 16 if rent not remedied

Day 13

Auto reminder through PT

Day 15

F11 expires

Day 16

F12 to be issued

Day 23

F12 expires

Day 24

Application to QCAT to Termination of tenancy

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