TenantsTips / Australia / I am in arrears with my rent

I am in arrears with my rent

If you suffer cash flow problems and can't pay your rent try to be upfront and honest with your landlord about your financial situation.

Pay your rental arrears as soon as possible.

If you are unable to pay attempt to make an agreement with the landlord/agent about paying off the arrears over time. Try to be upfront and honest with your landlord about your financial situation. This approach is much better than ignoring the problem. If you can come to an agreement send your landlord a letter to confirm any plans.

Make notes of any conversations you have and keep copies of any letters relating to the problem. These records would be considered as evidence if the issue is referred to the Consumer, Trader and Tenancy Tribunal to assess the matter.

If needed, seek help from a financial counselling service. The service may assist you and help you to confirm your financial situation and your inability to pay rent and arrears.

What happens next?

If you cannot pay your arrears or come to an agreement with your landlord you will be in breach of your rental agreement. If you are in breach of your tenancy agreement solely for rent arrears and the landlord/agent wants to end your tenancy, they may serve you with a termination notice. The rent must remain unpaid for 14 days or more before they can give you this notice. The landlord/agent can give you a termination notice without asking you to pay the arrears.

What is a non- payment termination notice?

A non-payment termination notice is a letter from your landlord asking you to either pay all rent arrears or prepare to leave the premises. It must be in writing and must be signed by the landlord.

A non-payment termination notice must include the following information:

 

  • The address of the premises.
  • The date the landlord/agent requires you to vacate the premises – they must give you notice of at least 14 days.
  • The reason for the notice: non-payment of rent.

 

A non-payment notice should also state the circumstances where you would not have to vacate the premises. You would not have to leave if you:

 

  • Paid any monies owed (this includes rent paid 2 weeks in advance).
  • Set up a repayment plan with the landlord.

 

It is the landlord’s responsibility to ensure that you receive a notice. It should either be given to you in person or mailed by post or fax.

If the landlord posts the notice an extra 4 working days should be allowed for delivery.

The process outlined must be followed before an eviction can take place. Removing a tenant from a property without a tribunal or court order is illegal and the landlord/agent can be fined up to $22,000 and ordered to compensate you.

What is a termination order?

A non-payment termination notice alone does not end your tenancy. Your tenancy agreement only ends once you give vacant possession (vacate the premises and hand in your keys). If you do not vacate the premises, your landlord can make an application to the Consumer, Trader and Tenancy Tribunal to intervene and assist with ending your tenancy agreement. The order will effectively end the tenancy and specify the day by which you must leave the premises. The landlord can fill out an application for a termination order at the same time they give you a non-payment termination notice. An application cannot be considered by the tribunal before the date for vacant possession in the notice.

If you make a payment clearing your arrears or adhere to an agreed repayment plan, the tribunal cannot make a termination order and your tenancy will continue.

Consumer, Trader and Tenancy Tribunals:

If the landlord/agent has applied to the tribunal, you will receive a 'Notice of Conciliation and Hearing' with the date, time and place of the hearing. You should be present at the hearing, even if you have cleared any monies owing or the landlord/agent tells you not to attend. Take any information and records you have to support your case.

Conciliation (assisted negotiation):

This is an opportunity to sort out the issue without the need for an order. The tribunal member will encourage you and the landlord/agent to resolve the rent arrears problem together in conciliation. If you cannot resolve the issue, the case will be heard by a tribunal representative.

What should I do at a hearing?

 

  • Ask the tribunal representative to grant you a time period to clear your arrears and to allow you to continue your tenancy.
  • Ensure that the tribunal representative logs any rent receipts or rent documents that you have brought with you.
  • Make an offer detailing the amount you can afford to pay per week.
  • Explain the issues that may arise if you have to leave.

 

The tribunal representative will look at evidence from both the landlord and the tenant. When making a decision regarding a termination order, the tribunal representative may take into account:

 

  • Your rent payments prior to falling into arrears.
  • Any effort made to clear the arrears.
  • The history of the tenancy.

 

The tribunal may not grant a termination order if it finds that you are ahead in rent payments and that you have not 'frequently failed' to pay rent on time.

What happens if a termination order is made?

Your tenancy is terminated and you must return the premises to the landlord. The circumstances of the tenant and the landlord will be taken into account and the tribunal will decide on the date for vacant possession.



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