Question 5

What do I do if a Tenant Stops Paying Rent?

Technically, paying rent is a voluntary action for the tenant. Even with a court order, the tenant can only be told to pay, never forced.

At Arbee Real Estate, we tackle the problem before it becomes a legal issue with our step-by-step no-payment process:

1)    3 Days Behind - SMS sent to tenant

2)    5-7 Days Behind - SMS and phone call to tenant

3)    10 Days Behind - Letter sent to tenant

4)    15 Days Behind - Serve Notice to Vacate (this obligates the tenant to vacate the property within 14 days and/or pay all monies owed at the discretion of the property owner)

5)    Approx 18 Days Behind - lodge application with the Victorian & Civil Administration Tribunal (VCAT) for an order of payment & a warrant of possession if necessary

6)    Approx one month behind (30-35 days) - tribunal hearing and order given to pay or be evicted

7)    Approx 5-7 weeks behind - eviction may occur if payments are not made as per the tribunal order and owner's instructions

The legal process surrounding lack of payment can be lengthy and it’s often difficult to reclaim the full amount owed. For this reason, we strongly advise all investors to take out landlord insurance. Otherwise, the eviction, cleaning and re-letting process can have a heavy financial impact.