Dealing with tenants that are not paying their rent on time can be a stressful experience, especially if you have a mortgage to pay or bill payments scheduled to be made. Confronting the tenant can also be a daunting experience, especially if you are not confident in dealing with conflict, this can be even more difficult if you have a great relationship with them.
When a payment has been missed it is important to deal with it as soon as possible. This isn't just about losing money as a landlord, it's about addressing a problem before it snowballs into an unmanageable situation.
Most of the time there is usually a very good reason as to why a payment has been missed. Rather than assume the worse (that the tenant can't be bothered, or doesn't want to) it's important to understand the situation your tenant is going through. After all, they are a valued partner, who looks after your house and unexpected things happen to them too.
Reasons why a tenant missed a payment can include real-world events such as the tenant themselves not being paid on time. They may be missing work through illness or injury of either themselves or a family member or being short of money temporarily due to Christmas or bills. In cases such as these, it may be appropriate to allow a small amount of leniency, and the majority of tenants will repay any owed money within a week or two, with minimal disruption to the landlord. When deciding on how lenient to be, look for tenants who show good intentions and genuine reasons, who readily engage their landlords to pay back the rent.
Engage in open and honest conversation and maybe even offer for them to pay back the missing rent in manageable, small, planned payments.
If the tenant has no reason for the late payment, or simply has no remorse and you feel they have no intention to pay in the near future then it pays to deal with this as soon as possible. If tenants don’t pay their rent on time it is a breach of the tenancy agreement and the Residential Tenancies Act. The tenancy agreement will say how the rent is to be paid and when.
Understanding the rights of a Tenant:
First off, it is important to understand the difference between a tenant and a flatmate and who you can legally deal with if things have turned sour. If you are a landlord dealing with missing rent payments - legally you can only approach the tenant(s) for payment. The tenant is the person who has either a tenancy agreement, and is legally the only person(s) responsible for the place. Any other people who are living in the property are considered flatmates and are the tenant's responsibility.
If you don't have a formal tenancy agreement but you can prove your tenant has paid rent regularly the tenancy agreement may be judged as an 'implied tenancy' and you will still be able to move forward with arrears under the Residential Tenancy Act rules.
Flatmates are people who are living in the property but are not part of the tenancy agreement, therefore they have different rights according to the Residential Tenancies Act. You can learn more about their rights by checking out the tenancy website here. This act only covers agreements between tenants and landlords.
Tenants are responsible to the landlord for the whole of the rent and any damage done, not just their own share. This means that a flatmate may be the source of a late payment but the primary tenant is the one that is held accountable for any late payments. A tenant has the right to live on the premises and cannot be asked to leave by another tenant or a flatmate. Only the landlord can give notice to leave.
How can the McDonald Property Management team help?
As you can see missed rent payments can impact both parties equally. Tenants can become stressed and anxious if situations beyond their control have rendered them unable to pay rent. Likewise, a landlord may be stressed about handling a confrontational situation. When you are neck-deep in the situation it can be very difficult to look at both sides objectively and work towards a fair solution for both parties. This is where a McDonald Real Estate property manager can help.
Our team are experts in handling the highs and lows of property management. They live and breath property management on a day-to-day basis. Not only are they up to date on legal matters, but they also deal with these situations on a regular basis.
And it's not just situations that arise while McDonald Real Estate is your property manager. The property management team have taken on properties where a long-standing debt has needed to be resolved. That's right, McDonald Real Estate won't turn you away if you are currently dealing with a rental dispute.
McDonald Real Estate will have a human conversation with both parties in an impartial and confidential manner to reach a workable solution for everyone.
It's not only the landlords that win when rental challenges can be solved. Many tenants have expressed a feeling of relief when they finally catch up with their due payments.
Having a human conversation where everyone's needs are met and circumstances addressed results in everyone feeling valued and respected. McDonald Real Estate will never resort to bully tactics.
McDonald have a great record of having low arrears company wide because we act quickly not letting tenant debt get out of control. Our goal is to help tenants with arrears to sort a plan promptly so that they are not overwhelmed by a situation where they compromise their tenancy and risk losing the home they rent.
For more helpful information about owning a rental property, you can download our 'Ultimate Guide to Owning a Rental Property' by clicking on the following link.
