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Helpful Tips

How we manage rent arrears

Aaron Athorn
Director & Business Owner
Phone:  (07) 3622 6436
Email: hello@collinsgregory.com.au

A common issue experienced by Landlords can be tenants who are constantly falling behind in the payment of their rent.

When a tenant is in rental arrears, it can become a rather costly situation for the Landlord. This can be particularly true if the agent does not follow, or does not have, a rental arrears procedure to limit payment issues.

Collins Gregory Real Estate has a Zero Tolerance Policy for rental arrears.

A quality Property Manager will ensure that all tenants agree and sign a rental payment agreement form upon the commencement of a lease and that they have a clear understanding about the obligations of paying rent on time. Should a tenant fall into arrears, under the Residential Tenancies and Rooming Accommodation Act (RTRA Act), action can only be taken against a tenant when they are seven clear days behind in their rental payments.

This does not mean that nothing can happen. Absolutely not! The best practice for an agency is that contact should be made with the tenant prior to this time to advise them of the rent payment being overdue. Section 280 allows your agent, on your behalf, to serve a breach notice to the tenant on the 8th day of rental arrears. Under legislation, the tenant is then given the allowed remedy period of 7 days to pay the rent owing. Your Property Manager should advise you promptly if further rent defaults occur and keep you informed of the developments until there is a resolution.

If a tenant does happen to fall into arrears or they become aware that they may be unable to make an upcoming rental payment when it is due, we encourage tenants to contact our team and discuss the situation with their Property Manager immediately.

If the full rent is not paid on or by the day it is due, on the following day the tenant will fall into rental arrears and the following procedure will be implemented.

After 1 – 4 days in arrears: Reminder phone calls, SMS messages & email notifications
After 5 – 6 days in arrears: Formal reminder letter posted and/or emailed
8 days in arrears: Notice to Remedy issued with 7 days to remedy the breach
17 days in arrears: Notice to Leave issued with 7 days’notice to vacate.

If after vacating the property there are monies owed in excess of the available bond, the Tenants named on the Tenancy Agreement may be listed with a tenancy database.