Wellington + 64 4 496 9990
Lower Hutt + 64 4 569 4873
Masterton + 64 6 370 6480

Articles and News

Email me when new posts are made to this blog
How to give notice to your tenant and what you can do if a tenant is no longer paying rent

By Gibson Sheat

How to give notice to your tenant and what you can do if a tenant is no longer paying rent

How to give Notice to Your Tenant

There are two types of tenancy agreements which a landlord and tenant can enter into: periodic tenancy and fixed term tenancy. Periodic tenancy has no fixed end date, while a fixed term tenancy has a specified end date.

To end a periodic tenancy, a landlord must give a minimum of 90 days’ notice. The law requires that the notice:

  1. must be in writing;
  2. give the address of the tenancy;
  3. give the date the tenancy is to end; and
  4. be signed by the person who is giving notice.

A landlord can give a tenant on a periodic tenancy, a 42 days’ notice period, if the property is:

  1. being sold and the purchasers want vacant possession; or
  2. if the owner or a member of the owner's family is going to be moving into the property; or
  3. if the property is used as employee accommodation and is needed again for this purpose (this would also have to have been stated in the tenancy agreement).

This 42 days’ notice must meet all the requirements of a 90 days’ notice and also state the reason the notice is being given (this must be one of the reasons above). If the reason is found to be untrue or not followed through, the tenant can challenge the notice in the Tenancy Tribunal.

Notice can be given to your tenant any day of the week and the tenancy end date can be any day of the week.

To end a fixed term tenancy you must give notice of termination no later than 21 days, and no earlier than 90 days, before the expiry date of the fixed term. If neither party does that, the fixed term tenancy converts to a periodic tenancy and the notice provisions set out above apply.

What to do if Your Tenant is No Longer Paying Rent

Unpaid and late payment of rent is a breach of the tenancy agreement and the Residential Tenancies Act 1986 (“the Act”).

It is always best to first contact the tenant, and notify them that a rent payment has been missed. The tenant may not be aware that a payment was missed and make the missed payment once notified.

If the tenant is not able to pay the rent owing in one lump sum, you can consider a payment plan that will allow the tenant to pay the rent arrears in smaller amounts on top of their regular rent payment. It is always a good idea to follow up the agreement in writing. You can formalise this agreement through a service provided by the Tenancy Services called FastTrack Resolution. This process is made up of three steps: Reach an agreement; Let the tenant know you are applying for FastTrack; and Submit the FastTrack Agreement.

1. Reach an agreement – The agreement must have the debt amount, details of the repayment plan, the date payments are to be made, and the consequences if payments are missed while the debt is being repaid.

2. Let the tenant know you are applying for FastTrack – Obtain a current phone number for the tenant and let them know that a mediator will be contacting them to confirm the details of the FastTrack Resolution agreement.

3. Submit the FastTrack Agreement online through the FastTrack application – This can be completed through the FastTrack section of the Tenancy Tribunal application. The filing fee is currently $20.44.

If a repayment plan cannot be agreed upon or the tenant is continuing to miss rent payments, a 14 Day Notice to Remedy can be issued to the tenant. The 14 Day Notice to Remedy is required to:

  1. be in writing;
  2. be addressed to the tenant with the tenancy address;
  3. state how much the rent is in arrears and that this is a breach of the tenancy agreement and the Act;
  4. state how much and when the last rent payment was received;
  5. state an amount and when the amount is required to be paid by (must be at least 14 calendar days);
  6. provide your contact details; and
  7. explain that if the amount requested is not received by the date stated you will apply to the Tenancy Tribunal to end the tenancy and for the tenant to pay all rent owed.

The Tenancy Tribunal is available if you and your tenant are not able to reach an agreement. The referee will make a ruling that is legally binding.


 
Topics: Property