Advice - Rent Arrears

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Are you behind in your rent?

 

Before you panic make sure you understand your obligations and your rights.

 

Also see our information on "Eviction in the ACT" and "Defending an Eviction"




















IMPORTANT NOTE: The information provided is based on the current state of ACT tenancy law and details may change. While every effort has been made to ensure the information on this site is up-to-date it is not a substitute for specific legal advice on complex matters.

Please take note of when the page was last updated.

If the information here does not apply to your specific situation we suggest you seek expert assistance and advice


TENANCY TIPS: 
Rent Arrears

Download a .pdf version of the tipsheet 

** last updated: 06/07/09 **

The Law in the ACT

Rent arrears processes are set out in the Residential Tenancies Act 1997 (RTA). The terms of your tenancy are set out in the RTA, and are known as the ‘standard terms’ – they are often provided as your lease (tenancy agreement). Clauses referred to here are from the standard terms.

You are required to pay your rent on time, as detailed in your tenancy agreement (if there are no details in your agreement or you don’t have a written agreement, you can rely on whatever has been the accepted practice and period of payment). Generally the agreement will say how much rent is paid, how it will be paid, and when it is due.

Rent in advance

Rent is generally paid in advance. This means that you pay a set amount of rent up front on or before the day you move into the premises.

For example, your tenancy begins on 2 March and you pay 4 weeks rent on that day. Your agreement says rent is to be paid fortnightly. Having paid 2 fortnights in advance, you might not expect to pay rent again until 30 March; however your agreement may say that the next payment is due on 16 March to keep your rent account always a clear fortnight in advance. It is important to take this into account when you give notice to end your tenancy or you may find you have paid too much.

The landlord/agent cannot ask for more than 1 calendar month’s rent in advance (cl 28).

Rent receipts

The landlord/agent must provide receipts for rent payments, unless the payment is made directly into a bank account. Keep receipts in a safe place.

Can the landlord change the way I pay rent?

No, not unless both parties agree to the change (cl 26). Your lease should specify how rent is to be paid.

What is ‘rent arrears’?

Your rent is in arrears when you are behind in your rent because you have not paid on the due date, or you have paid less than the amount due.

HOWEVER, action cannot be taken by the landlord/agent until rent has been due and unpaid for at least 7 days. (See Notice to Remedy later in this leaflet).

NOTE: NEVER WITHHOLD RENT in an attempt to make the landlord do repairs or fulfil other obligations under your lease. You leave yourself vulnerable to eviction if you do this.

You can apply to the ACT Civil and Administrative Tribunal (ACAT) for orders under Sections 83(b) and 83(g) of the RTA that allow you to pay your rent to the Tribunal until the landlord undertakes repair work, but the Tribunal must make these orders first and then you must continue to pay your rent to the Tribunal. *See Repairs Tip Sheet for further details.

What if I don’t agree that I am in arrears?

Mistakes and misunderstandings can occur. Check your rent receipts to see if a mistake has been made. If you make the rental payments into a special bank account, ask the landlord/agent for a bank statement listing all your payments.

Double-checking may stop the problem in its tracks.

What should I do if I am in rent arrears?

If you cannot make a rental payment, contact the landlord/agent as soon as possible and inform them when you will be making the payment.

If you aren’t able to pay off the arrears in one payment, contact the landlord/agent to explain the situation. You may be able to reach an agreement to pay off the amount over time, for example you could offer to pay an extra amount per week. BUT remember not to offer more than you can afford, as this will inevitably lead to problems.

Make such an offer in writing, sign, date and keep a copy. This will be useful even if the offer is not accepted, as the letter can be used as evidence that you have tried to fix the problem if action is taken in the ACAT. If the landlord agrees with the offer, get this agreement in writing.

Can I be evicted?

Being behind in your rent is a breach of your tenancy agreement. This can result in eviction, but not before certain steps have been taken.  The landlord/agent cannot evict you themselves. (see Tenancy Tips: Eviction in the ACT).

The Landlord/Agent’s Actions

A Notice to Remedy is only the first step.  Under Clause 92 of the Standard Terms the Notice to Remedy  must be served on or after the 8th day after the rent was due, stating that the outstanding amount is to be paid within 7 days. If you do this, no further action will be taken.

If the rent is still unpaid after 7 days, the landlord/agent  can issue a Notice to Vacate the property within 14 days.

If you have received two Notices to Remedy previously in your tenancy, and you get 7 days behind in the rent again, on the third occasion the landlord/agent can give you a Notice to Vacate without first issuing another Notice to Remedy.

A Notice to Vacate does not end your tenancy. Try to negotiate a written agreement with the landlord/agent for catching up on the rent.

If you cannot pay the arrears, you may decide it is best to move out. You would then be liable for rent up to the last day of the notice period or, beyond that, till the day you do move out.

If you do not move out and the landlord/agent wants to pursue your eviction, the following procedures apply:

ACT Civil & Administrative Tribunal

The landlord/agent must apply to the ACAT for a Termination and Possession Order before you can be evicted. The application can be made before the 14 days Notice to Vacate has even expired, as long as the Tribunal hearing is after the 14 days. Most landlords wait the 14 days to see if the tenant will leave voluntarily.

After the landlord has applied to the Tribunal, you will be sent a ‘Notice to the Respondent’, together with a copy of the landlord’s application. Once you receive this notice, act immediately: seek advice from the Tenants’ Advice Service, Welfare Rights & Legal Centre or an independent solicitor.

It is advisable (though not essential) to notify the Tribunal in writing if you intend to defend the eviction. Include all facts you want to rely on in your defence.

You will also receive a ‘Hearing Notice’, stating the date, time and place of hearing. If your rent arrears problem reaches this stage, see the leaflet, Tenancy Tips: Defending an Eviction.

In brief - to defend an eviction: 

  • Be at the Tribunal at the right time / the right day;

  • Be prepared - have a list of points you want to get across to the Tribunal Member: how/why you got behind in the rent, what steps you have taken, and  what you propose for the future;

  • Have ready and in good order any documents you want to show the Member;

  • Keep cool and be courteous, no matter what the landlord, agent or Tribunal Member says.

What orders can the Tribunal make?

The Tribunal has 3 options:

  • To dismiss the landlord’s application - for example, on the basis that there were no arrears or that the arrears have been made up;

  • To end your tenancy unconditionally on a specified day - it could be that very day; or you could be given up to 21 days to move out;

  • To make a conditional termination order, which means that the tenancy will continue on certain conditions (usually that you make up the arrears by a certain date and pay on time in the future).

If orders are made that end your tenancy and you do not vacate by the due date, the landlord can request a warrant (unless the Tribunal has already declared that the termination order itself will have the effect of a warrant), giving the police the power to evict you. Except in exceptional circumstances (see Section 40 RTA) the police must give you at least 2 days notice of the eviction day.

If you leave the Tribunal with conditional orders, you have been given a chance to keep your tenancy. However, if you fail to abide by the orders, the landlord can apply for a warrant for eviction. The matter will then be listed for hearing within 1 week. If you think you have not breached the orders, or you have a significant   excuse for the breach, you can present your defence at the hearing. Otherwise, the Tribunal will issue the warrant for eviction.

 

This is a summary of your rights and responsibilities.
If you have a specific problem, you should seek more detailed advice.

The information provided is based on the current state of tenancy law and details may change.
Tenancy Tips © 2009 Tenants' Union ACT
The support of the ACT Government through the Dept. Justice & Community Safety is gratefully acknowledged