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Here’s how to navigate the rent arrears process in New Zealand, while minimising stress for both you and your tenants.
Clear and timely communication should be your number one priority when dealing with rent arrears. Through communicating well and working together with your tenants, the whole process can be a lot less stressful for everyone involved.
Identifying the issue
To identify rent arrears early you need to be keeping a close eye on rent. Check that rent has been paid on the day it is due and record the payment in your rent book.
When you notice that rent is in arrears, send a friendly text or email, or give the tenant a call to remind them. It can feel like an awkward conversation to have, and you do need to choose your words wisely. Be very clear about why you’re messaging, and don’t make any assumptions about why rent is in arrears.
If you still haven’t had any communication from the tenants after two days, try contacting them again. Use every method of communication you have available to you, to make sure you’re covering all bases. Phones can break or be out of service, and emails can bounce, so exercise a bit of patience.
The best outcome at this stage is if you manage to get in touch with your tenant. You can now work together to find a solution to deal with the rent arrears. However, if you’re still unable to reach a resolution, you’ll need to move on to the next step which is serving a notice to remedy.
Be aware that late or non-payment of rent does not give the landlord the right to enter the property unannounced. You must always respect the tenants’ right to peace and privacy. If you want to go to the property to see if the tenants are still living there, the 48 hour notice period for doing an inspection applies.
Serving an official notice to remedy
Sometimes the tenant is unreachable, and has made no attempts to get in touch or to fix the rent arrears. Consequently, in New Zealand issuing a 14 day notice to remedy is the landlord’s next step. You can do this by email or letter but it must be written.
What is a 14 day notice to remedy? It is a formal letter that outlines to the tenant which part of their tenancy agreement they have breached. The letter states the amount that the tenant needs to pay to get their rent out of arrears, and the date that they need to pay it by. It must be actioned in 14 days from the date the notice was served, or else further action can be taken.
It is important to let your tenants know that a 14 day notice is not an eviction notice. This notice is an attempt to remedy a breach of the tenancy agreement, and they do not need to be worrying about being evicted from their home at this stage.
Keep in mind that the 14 days in this notice period are calendar days, not working days. This is especially important to remember if the notice is served over a period including public holidays.
Applying to the Tenancy Tribunal
If you’re unable to reach a resolution together, it’s time to involve a third party.
Tenancy Services might suggest mediation as a solution before getting to the stage where a hearing at the Tenancy Tribunal is required. A mediator is a third party who has a lot of experience with tenancy issues, and can guide tenants and landlords through the disputes process.
The mediator helps both parties to come to an agreement, but does not make a decision for you. If the landlord and tenant are still unable to come to an agreement, you will most likely go ahead with a Tenancy Tribunal hearing.
You can apply to the Tenancy Tribunal for termination of the tenancy if the tenant owes more than 21 days of rent.
Find out more about how to apply to the Tenancy Tribunal here.