Apr 29, 2022 |

Rent Arrears, Breaches, and Terminations – what are they and how do they affect you?

What are rent arrears?

Rent Arrears refer to when a tenant falls behind on their rent. Rent arrears can occur for several reasons including financial distress, bank issues, change of employment, forgetfulness, or confusion on what date the rent is due. Another common issue is that tenants do not leave adequate time for the transaction to clear into the Trust Account. For example, if rent is due on a Friday you need to make the payment 1-2 days prior to this to ensure there is enough time for the bank transfer and so the rent is received by the due date of Friday. If payment is made on the day it is due, it will take another 24-28 hours until it is received.

Receipts are provided by our trust accountant every time rent is received. On this receipt, you will find the date rent was received, the paid to date and how much rent we received. By reviewing this, tenants can be aware of exactly what date they are paid to. If you fall behind in your rental payments, you will receive reminders on day 2 and 5 of arrears.

What is a Breach Notice?

A Breach for Non-Payment of Rent is issued to a tenant on or after day 7 of rent arrears as per our arrears policy. This notice refers to a breach of the Residential Tenancy Agreement due to rent not being paid on time. This breach notice gives the tenant 14 days to pay the rent owing and, to pay an additional amount (such as one weeks rent)t to ensure they are ahead.  Failure to remedy the breach notice within the given time can result in a termination notice. However, this notice can also be issued earlier than 7 days if the owner requests we do so.

What is a Form 1A Termination Notice?

This Termination for Non-Payment of Rent is issued if the breach for non-payment of rent has not been rectified. If a tenant receives this 7 day Termination Notice after the 14 day breach, it states that they must vacate on the date provided, regardless of whether the tenant pays the rent or not. The owner can choose to terminate the tenancy by applying to Court. Any termination notices are discussed with the owner prior to being issued to the tenant.

What is a Form 1B Notice of Termination?

A Form 1B Notice of Termination can only be issued to a tenant who is in arrears if notice of breach of the agreement to pay rent, has not been given. This type of notice may be used if the owner is seeking to terminate the tenant’s Residential Lease Agreement and the tenant must vacate on the date specified. This must not be issued any earlier than 7 days of the tenant being in rent arrears. If the rent amount due is paid in full before the date specified, the tenant does not need to vacate, and their lease will no longer be terminated at this time. If the rent amount is not paid within the date specified, the owner can apply to Court to terminate the Residential Lease Agreement, and the tenant must vacate by the date specified.

However, if the tenant pays the rent amount and court application fee in full any time up to one day before the court date, the owner cannot continue with the termination.

If for any reason you are unable to pay rent, please inform your property manager so we are aware and can discuss accordingly.

Warm Regards,

Celsius Property Management Team