What happens if our tenant doesn't pay the rent?

Ask Kiri Barfoot - your property management questions answered

Dealing with tenants not paying the rent on time can be a stressful experience. Here's how our property managers navigate the process to minimise escalation and maximise your return on investment. 

At Barfoot & Thompson, we practice a zero tolerance policy for rent arrears. Here are the steps our property managers take when rent is late:

Day 1: A text message, phone call or email is sent to the tenant to provide them with a friendly reminder. If it is a first offence, often it is best practice to give the tenant the benefit of the doubt in order to preserve the relationship going forward.

Day 2-3: If we have not heard back from the tenant, then a reminder is sent via text message, email and phone call. Every method of communication is used to ensure that we have exhausted every means possible to contact the tenant.

Day 4-5: If the tenant is unable to be reached and / or have not paid, they are issued a 14-day written notice to pay the arrears. Depending on the method used to issue the notice (letter or email) the notice period or term of the breach notice will vary slightly. To mitigate this, our preferred method is to send the notice via email. A letter is also sent.

Day 6-10: If the situation has not been resolved, an application to the tenancy tribunal will be lodged under Section 56 of the Residential Tenancy Act.* The property manager will factor in several things when deciding when to apply to the tribunal, such as:

  • Is this their first offence?

  • Do we have any background information that suggests the tenant will not be able to rectify the situation - such as loss of job?

  • Are they repeat offenders and generally pay at the last minute?

  • Has the tenant gone on holiday and failed to set up an AP?

  • Has the tenant abandoned the property?

When the 14-day notice expires, if the situation has not been resolved then the application will stay lodged and Tenancy Services will send through confirmation of the application. At this time, it is common that we will receive a schedule outlining the mediation date or tribunal hearing.

It may take up to six weeks for the application to be processed through the Tenancy Tribunal. At this stage, the Tribunal will offer assistance in a mediation process, where an agreement may be reached with the tenant (i.e. a payment plan or a set period of time where the tenant will resolve the arrears).

If no agreement can be reached, a court order is issued for the tenant, where consequential clauses may be applied.

Once the tenant is over 21 days in rent arrears with no resolution reached, the landlord is able to apply for re-possession of the property under Section 55.

Our property managers are dedicated to finding the right tenants for your property, and ensuring that you get peace of mind and maximum return on your investment. Being proactive and prompt in following up on late rent ensures that tenants are on top of their payments, and helps prevent the situation from escalating further.

*This means that the tenant is not yet over 21 days in arrears, but we believe that by the time we get to the tribunal, they will be, and therefore be in breach of section 55. 

Are you a landlord or investor?

You can be confident that Barfoot & Thompson will take the utmost care of your property. Find out how easy it is to get started.