expert-q-a

Investors Ask: Tenant in arrears

By Lisa Indge

Q. I’ve recently found out that my tenant is very sick. I know that she isn’t working and she is behind by one week’s rent. I don’t want to make her move out, but I can’t afford to be out of pocket. What should I ask my property manager to do?

A. Your property manager should be advising you of the appropriate action they can take on your behalf. This is a situation that needs to be handled in a timely, professional and procedural way.

Firstly, you should have landlord insurance to cover you if your tenant does default on rent and the bond does not cover the final shortfall. You can only take this type of insurance out when your tenant is fully up to date with their rent so at this stage you are not able to take this action. Your property manager should have advised you to take out this insurance when you first became a landlord. If you don’t have this cover, you can put it in place when the tenant is paid up, which would provide you with protection in the future.

With the tenant currently one week in arrears, your property manager should be prepared to send a Notice to Remedy Breach or a Termination Notice Rental Arrears when the tenant is seven to 14 days in arrears, depending on which state your investment property is located in. If the matter is then taken to tribunal, the member may allow the tenant more time to vacate due to health reasons. In this case, your insurance is your protection.

It may seem harsh but this is an investment and you can’t afford to pay her rent for her. As such she will need to assess her situation regardless.

Lisa Indge, Managing Director, Let’s Rent


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