Is your residential tenant not paying rent?
Get your residential tenancy issues sorted – contact property law expert, Jennifer Edwards today to set up an appointment.
What To Do If Your Residential Tenant Is Not Paying Their Rent?
11 October, 2018 | Jennifer Edwards
A Tenant not paying their rent on time, or in full, is a breach of the tenancy agreement and the Residential Tenancies Act 1986.
Under this legislation Tenants must pay their rent in full and on time. There are 3 options available to Landlords for resolving rent arrears issues.
1. First – Talk to your tenant
Tenancy Services firstly advises Landlords to communicate with the Tenants, as there might be a genuine reason why the rent wasn’t paid, or was short paid. If you talked to your Tenant and come to an arrangement for them to pay the outstanding rent, it is important to follow up in writing to confirm the arrangements.
2. Fast Track Resolution Service
If the Tenant then does not pay, the second avenue Tenancy Services offers is a Fast Track Resolution Service. The Landlord and Tenant must have agreed on a plan for the Tenant to pay the outstanding rent to use this service. The Landlord must tell the Tenant that they are applying to the Tenancy Services for a Fast Track Resolution. The agreement between the landlord and tenant must include four essential points:
- The actual debt amount calculated up to, and including, the day before the next due payment.
- Details of how the debt will be repaid.
- The date the payments will begin.
- The consequence(s) agreed to if any payments are missed while the debt is being repaid.
You can apply for Fast Track when:
1. The rent is in arrears or other money is owed and you require a Monetary Order only as a consequence.
2. Where you have:
- issued a 14 day notice to remedy rent arrears and that notice has expired without remedy;
- OR the rent is 21 days in arrears or more (when you file your FastTrack application);
- And you require termination and possession of the tenancy as a consequence.
3. Unpaid bond – where you have:
- issued a 14 day notice to remedy unpaid bond monies and that notice has expired, but you have reached an arrangement to pay the unpaid bond money;
- And you require a Monetary Order and/or termination and possession order as a consequence for breaking that arrangement.
4. Unpaid water invoices – where you have:
- issued a 14 day notice to remedy unpaid water charges and that notice has expired, but you have reached an arrangement to pay the unpaid water charges;
And you require a Monetary Order and/or termination and possession order for breaking that arrangement.
www.tenancy.govt.nz has all of the information you need to apply for Fast Track.
If the matter cannot be resolved through Fast Track you will need to go to mediation. A mediator through Tenancy Services helps the parties communicate and come up with a plan to resolve the issues the Landlord and Tenant may have.
The mediator does not make decisions for you or tell you what to do, they help all parties come to an agreement on resolving the issues
Making a Mediated Order binding
Making a Once an agreement is reached, the mediator will check that all parties fully understand what it is they are agreeing to. The agreement is then written down as a mediated order. Each person is given a copy of the mediated order for their records. For telephone mediation, you’ll be sent a copy.
In most cases, the order needs to be made legal and binding. The mediated order is sent to the Tenancy Tribunal to be signed and sealed by a Tenancy Tribunal adjudicator.
When a mediated order is legal and binding, it will usually say what happens if either person does not stick to the agreement. The mediated order can then be enforced as if it was an order of the Tribunal. For example, if the order is about money owed and the money is not repaid, court collections can enforce the order.
If the mediation is about money owed, a Landlord and Tenant can agree at the mediation to enforce the debt with an attachment order. An attachment order is where payments are taken directly from the wages or benefit of the person who owes the money. This agreed attachment order is recorded in the mediator’s order.
Tenancy Tribunal Court hearing
If the parties cannot agree to a resolution through mediation, the application may be referred to the Tenancy Tribunal for a court hearing.
The Tenancy Tribunal can formalise what is agreed to at mediation, or can make a ruling on an issue that cannot be resolved through mediation. It can make the decision for the Landlord and Tenant and can issue an order that is legally binding on the parties.