What are your landlord rights when your tenant stops paying rent?

It’s one of the worst nightmares for landlords — a tenant who hasn’t paid rent for weeks and won’t vacate the property.

Unfortunately, a good tenant can quickly turn into a bad tenant.

This can happen due to personal troubles, health issues, drugs, they lose their job or get divorced.

But the problem is, as a property investor you not only stand to lose out on your rental income, which you’re most likely relying on to help pay your mortgage, but you may not be able to access your property or find new tenants until your existing tenants leave.

And the end result is that you could be significantly out of pocket.

So what are your rights as a landlord if this happens?

To minimise the potential of this happening it all starts before you take on a tenant.

Make sure your property manager checks their past rental history using a national rental database, current real estate references and make sure your potential tenant doesn’t overextend themselves.

At Metrocity Realty we ensure thorough rental checks are carried out including previous rental history references, employment references and personal references are received with all of our applications.

I believe it’s important to have a good line of communication with your tenant by using a good property manager. At Metrocity we have an incoming tenant induction program where the property manager sits down with all tenants to go through all our expectations from the tenant, including paying rent on time.

Hopefully would have carried out regular inspections of your property and answered any tenant requests punctually.

This should make communication during challenging times a little easier.

Find out why your tenant is in arrears

Your property manager should know the day your tenant is in arrears by checking their trust bank account.

Their first step should be to find out why your tenant isn’t paying rent, and to begin making polite enquiries and assist in minimising your loss. At Metrocity we start contacting the tenant from 2 days in aren’t arrears. If you would like a copy of our rent arrears policy please let us know.

The reason you haven’t received the rent could be something quite simple and easily fixed, such as:

• forgetfulness
• a misunderstanding between co- tenants
• temporary cash flow problems

Or it could be something more complicated and long-term, such as:

• your tenant has lost their job
• your tenants are a couple and have split up
• your tenant is suffering from challenging personal issues (such as bereavement or work-related stress).

What your property manager should do next

If a tenant does not pay their rent by the due date, they are considered to be ‘in arrears’.

In Queensland if tenants become 7 days or more in arrears, they can be issued with an official notice to remedy breach. If the tenant does not remedy this breach within 7 days the tenants can be issued with a formal notice to vacate the property with 7 days’ notice.

The number of days in rental arrears before these notices can be sent varies around Australia, so it is important to be familiar with your local tenancy laws.

If the tenant does not vacate the property on their own accord after the Notice to Leave has been issued a landlord or property manager cannot evict a tenant, the proper procedures must be followed.

Then the matter must be brought before the relevant tenancy authority which in Queensland is Queensland Civil and Administrative Tribunal (QCAT).

The tribunal may then issue a warrant of possession to evict the tenant.

However, at Metrocity Realty we take a proactive approach by monitoring arrears daily, because if a tenant falls behind in their rent, the sooner you know about it, the sooner you can attempt to resolve the issue and mitigate any financial loss.

We call, sms and email the tenants daily to notify them they have failed to pay their rent on time after they’ve been in arrears for just 2 days.

Going to the tribunal is always the last resort and we generally find by taking our approach it is avoided.

Usually the matter can be resolved by giving the tenant the option to make part rental payments or more frequent payments such as weekly to get them through what is hopefully just a bad patch.

If the tenant must be evicted, you will most likely be able to retain part or all of the bond to make up for your loss. Also any additional loss should be covered by your Landlord’s insurance.

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