The following information was correct at the time of writing; however it’s an ever-evolving industry so we do recommend doing your own research.

Are you at your wit’s end with your tenants’ late rental payments? Or maybe you want to know how to evict someone who doesn’t pay rent? You’re not the only one. Landlords often do not know how to approach this situation, whether for fear of conflict or not being sure about their legal rights.

If you want to find out how to handle tenants who pay rent late, read on. We will cover all possible scenarios and recommend the legal way to deal with them. We will also answer landlords’ most frequently asked questions. Keep reading to discover:

• How to deal with late paying tenants;
• Your and your tenants’ rent rights and responsibilities;
• How to get help for every possible rent-related scenario out there.

Rental payment schedule

Rental payment conditions

Any rental payment conditions relating to property damages and wear and tear are mentioned in the tenancy agreement. Some common examples include:

• Not allowing tenants to smoke in the house.
• Limiting the number of people allowed to live in a house.
• Forbidding parking cars in certain areas of a property.

Reasons why tenants may refuse to pay rent

Tenants are legally responsible for paying the rent. If they don’t, they incur a late rental payment fee. Yet, on occasion, they might refuse to do so for reasons such as:

• They are waiting for the landlord to conduct promised repairs.
• One of the multiple tenants is unable to pay for their part of the rent.
• The tenants’ financial situation means they cannot afford it that month.

 

In the two first scenarios, tenants will still have to pay rent. They are most likely to receive a late rental payment notice from their landlord. In the last scenario, it is up to the landlord whether they want to negotiate a solution with their tenant.

Naturally, landlords will not be happy to hear that their tenants are refusing or are unable to meet their obligations. You may be feeling angry at the prospect of not getting paid, but you should act rationally. Try calming down and following our bulletproof plan for resolving the situation in the best manner possible.

If you can’t calm down, you can even call the police – this was exactly what the landlord did in the video below! Watch how the non-paying tenant explained the situation:

If tenant doesn’t pay rent: resolving the issue on your own

So your tenants always pay rent late and you want to attempt to resolve the issue on your own. Here are your options:

1. Exchanging emails, letters, or text messages

Message the tenant by email, letter or SMS and tell them the solution that you propose.

The advantage of this method is that, with written communication, you have a record of what was said and promised. This could be useful if things escalate to the Tenancy Tribunal after sending the relevant letter of demand for rental payment.

The problem is that this method lacks urgency and is impersonal, while it also means that you’re not in control of how long it takes to receive a reply.

2. Personal meeting

If your tenants won’t pay rent, talking face-to-face is the most direct way to resolve the issue. It is quicker than sending a letter too.

However, if you are not well prepared for the meeting and don’t know your rights and responsibilities in advance, there’s a chance it could lead nowhere, and you’ll have to follow up.

To prepare for a tete-a-tete meeting with your tenant, read the self-resolution guide offered by Tenancy Services first.

Reaching an agreement

If your communication efforts are successful and you do manage to reach an agreement with your tenant, here’s what to do:

• Write down what you’ve agreed, then sign and date it.
• Arrange a follow-up meeting to check how things are going.
• Apply for FastTrack Resolution if you want to formalize your agreement.

Tenant can’t pay rent: going to the Tenancy Tribunal

If after your efforts, your tenant refuses to pay rent still and you haven’t reached an agreement, these are your options:

• If your tenant owes less than 21 days rent, you can issue a 14-day notice to remedy, giving the tenant two weeks to fix the problem.
• If your tenant doesn’t remedy overdue rent or if they owe 21 days of rent or more, you can apply to the Tenancy Tribunal to either organize mediation or a court hearing to terminate the tenancy.

If you have written a letter to tenant to pay rent on time but they won’t cooperate and you need advice, you can always call Tenancy Services.

Notice to remedy

A notice to remedy is a notice given by a landlord or tenant when they believe the other party has breached the tenancy agreement.

In the case of rent arrears, it is essentially a demand letter for rental payment. It gives the tenant 14 days to fix the breach.

For a notice to pay rent or quit template, head here.

When to apply to the Tenancy Tribunal

It is time to apply to the Tenancy Tribunal when you have exhausted your other options to resolve disputes with your tenants. A landlord could apply to the Tribunal, for example, in the following situations:

• When a tenant does not pay rent for more than 21 days;
• When a tenant needs to pay for damages caused to the property;
• When there is disagreement about repaying the bond.

Where to apply to the Tenancy Tribunal

Landlords can apply to the Tenancy Tribunal online by filling in an eviction notice for failure to pay rent form. The application process is simple and does not take longer than ten minutes, but you will need to have readily at hand and be prepared to submit all necessary documentation.

You can also make an application on paper to send in your failure to pay rent form. The application fee is $20.44 (including GST).

Evicting a tenant for multiple cases of overdue rent

Applying to the Tenancy Tribunal to terminate a periodic tenancy

Recent amendments to the Residential Tenancies Act (RTA) mean that landlords can now apply to the Tenancy Tribunal to terminate a periodic tenancy in certain situations. Before applying to the Tribunal, a landlord will have issued the tenant with 3 written notices:

1. If, within a 90-day period, rent that was due has remained unpaid for at least five working days, the landlord may issue a first notice.
2. A second notice is served if rent falls due again and has not been paid within 5 working days of the second due date.
3. A third notice can be served in the same way as a second notice.

After all notices have been served and, within 28 days after the third notice was given to tenants, landlords can file an application to the Tenancy Tribunal.

Example

Below we explain how landlords are to send their pay rent or quit notice in a real example scenario. Note that to estimate the following, we are using an assumed rent payment date of Tuesday March 1st and that in our example tenants are paying rent on the 1st of each month.

• Date when the rent is due: Tuesday March 1st:

Landlords will be expecting payment from their tenants on the date the rent is due. If this day passes and, for the first time, their tenants haven’t paid rent, landlords will have to start considering sending a gentle pay rent or vacate notice.

• Date of the 1st notice: Tuesday March 8th:

Five working days after the rent due date, landlords can issue the first notice to tenant to pay rent, along with a separate 14-day notice to remedy.

• Date of the 2nd notice: Friday April 8th:

Following the second occasion of rent remaining unpaid for five working days after the rent due date, landlords can issue a second notice from landlord to tenant for failure to pay rent.

• Date of the 3rd notice: Monday May 9th:

Similarly to the first and second notices, the third notice to pay rent or vacate form is sent on the third occasion of unpaid rent five working days after the rent due day.

• Dates when the landlord can apply to the Tenancy Tribunal: Tuesday May 10th – Thursday June 16th:

Once three notices of overdue rent have been issued within a 90-day period, the landlord can apply for termination. Landlords have to do this within 28 working days from serving the third notice to their tenant.

How to avoid late rental payments in future?

If you want to avoid late rental payments by your tenants, it is recommended to:

• Always check their credit to ensure they have a good record of rental payments prior to renting to them.
• Make your expectations clear when it comes to rental payments when you’re signing the tenancy agreement.
• Keep a good record of your tenancy-related documents so you always know when rent is due.
• Call your tenants as soon as a rental payment has been missed.
• Use a mediator to communicate with problematic tenants to show them you are taking the situation seriously.

Overdue rent: FAQ

If you are a landlord and your tenant doesn’t pay rent, don’t despair. Landlords can now take steps to legally terminate tenancies for rent arrears, and the process is simple. When you are renting your property, it is important to stay up-to-date with rental laws and be aware of what your rights and responsibilities are.

Before you apply to the Tenancy Tribunal, you will need to issue your tenants with the appropriate notices for rent arrears. You will need to have patience, as the whole process from first notice to a Tenancy Tribunal application takes a while.

If you have questions about late rental payments or anything tenancy-related, do not hesitate to contact CGPM. As Auckland’s leading property managers, CGPM’s team is qualified to provide you with professional, expert advice for your property management needs.

Below we answer landlords’ most common questions.

1. By law, when is the last day to pay rent?

If you do not pay rent within five working days of its due date, you will be sent a 14-day notice to remedy, giving you two weeks to pay the overdue rent.

2. How to remind a tenant to pay rent?

To politely remind a tenant to pay rent:

• Contact them to ensure they know what day the rent is due and how much is owed.
• Remind them in writing how they can pay rent, by telling them which payment methods are accepted for example.
• Encourage them to contact you directly if they are facing difficulties paying the rent.

3. Can I postpone the rental payment until the next month if my tenant can’t pay rent this month?

It is up to a landlord’s discretion whether they will be flexible enough to allow postponing rental payment until the next month. If a landlord does accept to postpone rental payment, they should make a written agreement with their tenants about this so that there is a record.

4. What to do if tenant doesn’t pay rent?

If a tenant doesn’t pay rent, landlords can issue them with notices and then apply to the Tenancy Tribunal for termination of the tenancy.

5. What to do if the tenant didn’t pay rent and left?

Just like a landlord would have to send a tenant a pay rent after eviction notice, they have to resort to legal avenues if a tenant leaves a property without paying rent. Having rental payment insurance comes in handy in this scenario.

6. If someone doesn’t pay rent, can you kick them out?

After serving the tenant with the relevant notices and applying to the Tenancy Tribunal, landlords can eventually kick out tenants who refuse to pay rent.