The Serial Late Paying Tenant

10 Mar 2014
EAC
1071
0

How best to deal with this problem

Most offices can easily identify a list, hopefully a short one, of “delinquent” late paying tenants, those that are habitually in arrears and who just manage to pay their rent before the matter presents at the tribunal. Sometimes the only way to get the rent paid is to serve a termination notice at day 15 in the knowledge that this will cause rent to be paid but wastes your time and often creating accounting delays and the transfer of funds to your client.

The position of the property manager is strengthened considerably by strategically using the provisions of s89 of The Residential Tenancies Act 2010. The relationship between sub sections (2), (3) and (5) should be noted particularly

89. Repayment of rent owing following issue of non-payment termination notice

  1. This section applies if a landlord gives a tenant a non-payment termination notice.
  2. The Tribunal must not make a termination order on the ground set out in the notice if the tenant pays all the rent owing or enters into, and fully complies with, a repayment plan agreed with the landlord.
  3. A termination of the residential tenancy agreement solely on the ground of non-payment of rent, and any warrant for possession issued as a result of any order for possession, cease to have effect if the tenant pays all the rent owing or enters into, and fully complies with, a repayment plan agreed with the landlord and the tenant has not vacated the residential premises.
  4. If a tenant repays all the rent owing or enters into, and fully complies with, a repayment plan agreed with the landlord, the landlord must notify:
    (a) the Tribunal, if the landlord has applied to the Tribunal for a termination order on the ground of non-payment of rent and the application has not been finally dealt with, or
    (b) the Sheriff, if a termination order has been made and a warrant for possession of the residential premises has been issued but has not been enforced by the Sheriff.
    Maximum penalty: 20 penalty units.
  5. The Tribunal may, on application by a landlord, make a termination order despite subsection (2) or (3) if it is satisfied that the tenant has frequently failed to pay rent owing for the residential premises on or before the day set out in the residential tenancy agreement.
  6. If the Tribunal makes a termination order as referred to in subsection (5), a warrant for possession may be issued as a result of that order, even if the tenant has paid all rent owing or complied with a repayment plan.

The following comments are an extract from Directions CD 2011-2 issued by the then Chairperson of the CTTT, Kay Ransome, and published in March 2011 and are particularly helpful.

3.1 Where an application to the tribunal is made based on a non-payment termination notice and on the grounds that the tenant has frequently failed to pay rent owing for the residential premises on or before the date set out in the residential tenancy agreement, the Tribunal may make the following orders as appropriate:

  • a termination order;
  • an order for specific performance; and/or
  • a money order.

 
3.2 If a specific performance order is made, the Tribunal may also grant the landlord the right to have the matter re-listed if the tenant fails to comply with that order in order to determine whether the tenancy should be terminated. A re-listing will only be granted where it appears on the evidence presented that the Tribunal could make a termination order at the next hearing.”

By lodging your application based on both the arrears and the frequent non payment and seeking the orders as detailed above you are establishing a process whereby if the tenant pays the initial arrears and there is no order for possession but there is an order for specific performance, that is pay the rent on time, and that is not complied with then the next hearing should be successful.

This process involves a little more work initially but has proved to be effective in demonstrating to the tenant that you are serious about arrears control and they cease to be late in future in the knowledge that any more late payments, in breach of the specific performance order, may result in a termination.

Both the NCAT Termination & Possession Application form and the Hearing Notes make provision for this process, practitioners would be well advised to make use of this facility.

Enquiries to EAC Agency Practice Helpline on 1300 137 161.

Leave a Reply