What Happens if a Tenant Stops Paying Rent?

One of the biggest concerns for any landlord is what happens if a tenant stops paying rent. While most tenancies run smoothly, rent arrears need to be dealt with quickly and correctly when they occur.

At RENTit Property Management, rent payments are monitored so missed payments can be identified early. The goal isn't simply to issue notices. It's to understand what has happened, get the rent back on track where possible, and protect the landlord's position if the problem continues.

Act Early

A missed rent payment doesn't necessarily mean you have a bad tenant.

There could be a simple explanation, such as a banking issue, a change in payday or an unexpected financial problem. The first step is normally to contact the tenant promptly and establish what has happened.

If the issue can be resolved quickly, that may be all that's required.

What you don't want to do is ignore the problem and allow a small amount of arrears to become a significant debt.

What Happens if the Rent Isn't Paid?

Not paying rent when it is due is a breach of the tenancy agreement and the Residential Tenancies Act.

If the rent remains unpaid, a landlord can issue a 14 day notice to remedy. This formally advises the tenant of the breach and gives them an opportunity to bring their rent up to date.

It's important that notices are completed and served correctly. If further action is eventually required, having accurate records of payments, communication and notices becomes particularly important.

What About Repeated Late Payments?

A tenant doesn't necessarily have to build up a large debt before repeated late payment becomes an issue.

For periodic tenancies, there is a specific process for repeated late payments. If rent remains unpaid for at least five working days on three separate occasions within a 90 day period, and the correct written notice is issued on each occasion, the landlord can apply to the Tenancy Tribunal to terminate the tenancy.

This particular three notice process does not apply to fixed term tenancies.

However, landlords can still take action over unpaid rent during a fixed term tenancy. This can include issuing a 14 day notice to remedy and applying to the Tenancy Tribunal where the requirements are met.

This is why every missed payment should be recorded and followed up promptly, regardless of whether the tenancy is periodic or fixed term.

When Can the Tenancy Tribunal Become Involved?

If a 14 day notice isn't remedied, the landlord can apply to the Tenancy Tribunal and seek orders relating to the unpaid rent and, where appropriate, termination of the tenancy.

There is also a separate provision where the rent is at least 21 days in arrears when the

Tribunal application is filed. In that situation, the landlord can apply to the Tribunal for termination on the basis of serious rent arrears.

Importantly, this can apply to both periodic and fixed term tenancies.

The key point is that landlords don't simply have to wait and hope the situation improves. There is a legal process available when rent arrears cannot be resolved.

Communication Still Matters

Formal notices are important, but so is communication.

If a reliable tenant experiences a genuine short term problem and communicates openly, agreeing on a realistic repayment plan may produce a better outcome than immediately trying to end the tenancy.

Any arrangement should be clearly documented and the rent should continue to be

monitored closely.

The objective should always be to resolve the problem where possible while protecting the landlord if the agreed payments aren't made.

How RENTit Handles Rent Arrears

At RENTit Property Management, we monitor rent payments and follow up when a payment is missed.

Where necessary, we'll communicate with the tenant, keep the landlord informed, issue the appropriate notices and escalate the matter if the arrears aren't resolved.

Good rent arrears management isn't about waiting until a tenant owes thousands of dollars before taking action. It's about identifying the problem early, communicating clearly and creating a documented record from the first missed payment.

So, what happens if a tenant stops paying rent? The key is to act early and follow the correct process. The longer rent arrears are allowed to grow unchecked, the harder they can become to resolve.

This article provides general information only. Tenancy circumstances can differ, so landlords should seek appropriate advice before taking action to terminate a tenancy.

Landlords have legal options when rent falls into arrears, but following the correct process and acting early is important.