4 steps to managing rental arrears

Pay The Rent

During January and December, rental arrears is usually the biggest problem. This time of year, tenants have over spent during Christmas and New Years. Or they have had hardship, as it can be difficult for low income families to get through this time of year.

  1. Planning ahead of time. The first thing that you can do to keep control of rent arrears during this period, is looking ahead. In November we would send all our tenants a letter to wish them well over the Holiday Season. I’d also remind them that if anyone falls into rent arrears, strict procedures will be taken to manage this issue with the tenancy tribunal involved every time. This alone should discourage those that plan not to pay rent for the week of Christmas, and play catch up in January.
  2. Issue a 14 day notice. With a large caseload, rent arrears should be monitored daily. Anyone on my 7 day’s + list instantly gets a 14 day notice to remedy the rent arrears. This is a hardline approach, but it gets them to contact me, which starts the conversation about how they can repay the amount owing.
  3. Make a tribunal application. Before the 14 day notice is posted, and emailed. I would make my Tenancy Tribunal Application on the same day. You don’t have to wait for the 14 day notice to run out. It can be done on day one of the 14 day notice.
  4. Repeat steps 2 and 3. Every day, especially during December and Jan, time needs to be put aside to check rent arrears and issue the 14 day notices and make tribunal applications. This took more time that I would have liked, but it has helped keep control of the arrears outstanding.    

When February comes round, I will be busy with mediation appointments. During these mediations, I would agree to no less than $50 extra per week for rent arrears, plus the full weeks rent. This would be due on a set day each week. With an eviction clause effective if rent was not paid on the due date. One of my tenants may get evicted using the eviction clause each year.

Some tenants will not make it to mediation, and the application will be sent to court. By the time you get a court date, it could be the end of Feb, early March. If tenants ended up in court, I would be asking for termination. Unless the courts see that the tenants can actually pay the full amount due.  They will grant you vacant possession, and refund the bond to cover any rent arrears. One or two of my tenants will go through this process each year.

Getting vacant possession of the house may require a bailiff. This can be applied for separately through the courts using the order for vacant possession. Once you get vacant possession, change the locks and do your final inspection. This is where you can make a further application to the tenancy tribunal for vacated costs, which can include the change of the locks, cleaning, rubbish removal, and repairs.

By March/ April, things will be back to normal again.

If you would like to talk about property management, please don’t hesitate to contact me.







Published by

The property manager

Find out more at www.patrickrankin.co.nz

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