Help! My tenant is in arrears, what do I do?

It isn't the situation you want to find yourself in but it does happen - your tenant is missing rent payments and now you're out of pocket. 

But what do you do? 

Navigating this aspect of property management can be complicated; if you don't know what you're doing. 

Below we've listed out how best to navigate rental arrears, and how to deal with tenants that aren't paying.

Talk

If you have a generally excellent tenant it is a good idea to talk to them about a late or missed payment first. 

It may be a simple misunderstanding, a technology problem or they may have fallen into short term financial hardship.

Whatever the case, it is much easier to address the problem early on than it is to pursue more aggressive legal options later. 

And if they are an especially good tenant they'll likely be grateful and reward you by continuing to look after your investment.

What if this is reoccuring?

If missing payments are a reoccuring problem with your tenant it might be time to take more substantial action. Especially if the debt owed to you begins to pile up.

The larger the rent owing to you, the less likly you are to see that money. 

In this case, you should look at the lease agreement you have with your tenant. A standard lease will set out the terms and conditions where either party can terminate the lease, and in your case, begin the eviction process.

And it is a process - you cannot order a tenant to leave your property without following the proper proceedure. 

This will land you in trouble, not the tenant.

So what do I do?

In South Australia tenants are breaching the lease if they fall more than 14 days behind in rent. 

At this point you may alert them to the breach of their lease agreement by issuing them a Form 2 (PDF). 

The Form 2 details how the tenant is breaching the lease, whether that is unpaid rent or any other breach. 

The Form 2 also gives the amount of time the tenant has to remedy the breach. If the tenant fails to comply after this date you may move on with the eviction process. 

What's next?

It is important to know that even after you've reached this point you cannot enter the premises unless: 

a) The tenant has abandoned the premises; or
b) The tenant has voluntarily given up possession of the premises; or
c) You have applied to the South Australian Civil and Administrative Tribunal and received an order allowing you to take possession (in which case you may want to read up on how to deal with SACAT). 

Repeat Offenders

Some tenants will comply and remedy the breach. Which enables them to continue living at your property. 

However, if your tenant is served two separate breach notices for overdue rent within 12 months you can apply to SACAT to have that tenant evicted. Without having to send a third breach notice. 

Keeping the peace

Getting to the stage where SACAT becomes involved is obviously not ideal.

Not only can this be a lengthy process, but it will be a costly one. 

So wherever possible it is better to resolve rental arrears issues early on. Whether you're managing the property yourself or have someone doing it for you acting early is always better.

It's better still to not let bad tenants in to begin with.

If you want help managing your property or finding good tenants get in contact with us today. We will help you navigate rent, and other property management problems.