Consider why the tenant is in arrears
In many situations, the tenant will have unintentionally ended up behind in paying their rent. Unintentional causes for rent arrears could be:
- An issue with the timing of payments in and out of the tenant’s bank account
- Unexpected and unavoidable expenses that have blown the tenant’s weekly budget, or
- A problem with a flatmate not paying their share of the rent on time.
In other situations, the problems with paying rent may be more significant and ongoing, such as where the tenant has lost their job, or their rent has increased to a level that is no longer affordable.
The options for the tenant will depend a lot on the reasons why they ended up in rent arrears and what their opportunities are for getting back on top of their rent payments.
Help the tenant work out what they want to do
Have an honest conversation with the tenant about what they want to do. It’s important to work out a plan for paying back any overdue rent, but it is also important to work out with the tenant whether they want to stay in the tenancy or to exit from it. This will likely depend on whether they feel able to meet their rent obligations over time and what, if any, alternative housing options they have.
Take action to get out of rent arrears
There are a range of actions the tenant can be supported to take:
Case study
Nadia usually pays $300 a week in rent. She has recently lost her job and for the last two weeks she has missed her payment. The landlord has left a message on her phone asking for the money to be paid immediately.
Nadia wants to get on top of the rent payments but can’t afford to pay it all at once. Because she owns assets over the threshold, Nadia is not eligible for the Rent Arrears Assistance payment from Work and Income. She has now got some part time work and, after putting together a budget, she thinks she can manage repayments of $50 a week.
Nadia owes her landlord $600, which if repaid at $50 a week will take her 12 weeks to pay off ($600 / $50 = 12 weeks). So, for the next 12 weeks Nadia will need to pay $50 a week on top of keeping up with ongoing rent payments, ie, $350 per week for the next 12 weeks.