The payment of rent is a critical part of the landlord / tenant relationship - particularly from the perspective of the landlord. Because of this, rent is often one of the issues leading to conflict or to a dispute between the landlord and tenant.
How the rent is paid
The tenant and the landlord have to agree how the rent will be paid (ie, the place or bank account number where the rent is to be paid) and include details about this in the tenancy agreement (s 13(l) RTA).
Most people pay their rent by automatic payment (AP) into their landlord’s bank account. Some pay in cash, and a smaller number pay by cheque (though this option is fast disappearing with the phasing out of cheques).
The landlord must provide the tenant with receipts for their rent payments when no other payment record is available to the tenant (s 29 RTA). The landlord must also keep rent records and the tenant can ask for a copy of these at any time (s 30 RTA). It’s a good idea for tenants to keep their own rent records as well, so that if there is any dispute, they have proof of their payments.
Tenants should avoid paying rent in cash
If possible, tenants should avoid paying their rent in cash. There is a risk with cash that an adequate record of payments is not being maintained by the landlord and so proving payment may end up being a problem at a later stage.
Other possible issues are that the tenant may have to travel to the landlord to make the payment, which can take time and money, or if the landlord or property manager comes to the property to collect the rent, this can sometimes become a way of them checking up on the condition of the property, or the behaviour of the tenant without following the rules around inspections.
If rent is paid in cash, the tenant should make sure they get a receipt for every payment they make and keep these in a safe place.
Note
Tenants should be strongly encouraged to pay into the landlord’s bank account (preferably through an automatic payment), rather than in cash.
Paying rent by automatic payment is encouraged
There are several reasons why paying rent by automatic payment is preferable:
- There is an automatic record of the payment, which it is difficult to dispute.
- It is more secure. The tenant does not have to hold onto cash, with the risk that it may be stolen or spent on something else before making the rent payment.
- Once it’s set up, it’s a straightforward process for the tenant (as long as they ensure there are adequate funds in their account to make the payment).
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