Understanding Rent Arrears: A Guide for Landlords and Tenants in New Zealand
Introduction
Rent arrears occur when a tenant fails to pay their rent on time. This can be a stressful situation for both landlords and tenants. In New Zealand, the Residential Tenancies Act (RTA) provides guidelines on how to handle rent arrears. This blog post will explain what rent arrears are, what actions landlords can take, and what tenants should do if they find themselves in arrears.
What are Rent Arrears?
Rent arrears refer to overdue rent payments that a tenant has not paid by the agreed-upon date. This can happen due to various reasons, such as financial difficulties, misunderstandings, or negligence. Regardless of the reason, it’s essential to address the issue promptly to prevent further complications.
Actions Landlords Can Take
- Communicate with the Tenant
The first step for landlords is to communicate with the tenant as soon as possible. A polite reminder may be all that is needed to resolve the situation. It’s essential to approach the tenant in a non-confrontational manner and inquire about the reasons for the delay.
- Issue a 14-Day Notice to Remedy
If the rent remains unpaid, the landlord can issue a 14-day notice to remedy. This notice gives the tenant 14 days to pay the overdue rent. According to the RTA, the notice must include specific information, such as the amount of rent due and the period it covers.
- Apply to the Tenancy Tribunal
If the tenant does not pay the rent within the 14-day period, the landlord can apply to the Tenancy Tribunal. The Tribunal can issue orders for the tenant to pay the arrears, set up a payment plan, or, in some cases, terminate the tenancy. Landlords can also seek compensation for any financial losses incurred due to the arrears.
- Seek Mediation
Mediation is an alternative dispute resolution process where both parties work together to reach an agreement. It’s a voluntary process facilitated by a neutral mediator. Mediation can be a more amicable and less costly way to resolve disputes related to rent arrears.
Actions Tenants Can Take
- Communicate with the Landlord
Tenants should notify their landlord immediately if they are unable to pay the rent on time. Open communication can help prevent misunderstandings and allow both parties to discuss potential solutions.
- Seek Financial Assistance
Tenants experiencing financial difficulties can seek assistance from various sources, such as Work and Income New Zealand (WINZ), which may offer support or advice on managing payments. Tenants can also consider setting up a budget or seeking financial counseling.
- Negotiate a Payment Plan
If tenants cannot pay the full amount of rent arrears, they can negotiate a payment plan with the landlord. This plan can spread the repayment over a period, making it more manageable for the tenant.
- Consider Moving Out
If the tenant cannot afford the rent, they may consider moving out. However, it’s important to note that tenants must provide the required notice period as per their tenancy agreement or negotiate an earlier termination with the landlord.
Conclusion
Handling rent arrears requires prompt action and clear communication between landlords and tenants. Both parties should be aware of their rights and responsibilities under the Residential Tenancies Act. For landlords, it’s crucial to follow the correct legal procedures, while tenants should seek assistance if they are struggling financially. By working together, landlords and tenants can often resolve issues related to rent arrears amicably.
Disclaimer: The information provided in this blog is for general informational purposes only and should not be construed as legal advice. NG Property Management is not liable for any actions taken based on the content of this article. For specific legal advice or guidance, please consult with a qualified legal professional or the relevant authorities.
