expert-q-a

Investors ask: Problematic tenants

By Lisa Indge

Q. I have a tenant who frequently pays their rent late, which is becoming increasingly problematic. How much leeway should I be giving them, and what action should I take? 

A. So your tenant is in arrears again – what do you do? Well, the first thing I would say is, don’t accept it. It’s not acceptable to have a tenant who frequently pays late. Once or twice maybe you can forgive, but only if there’s an appropriate reason for that.

In New South Wales we had legislation updated in 2010 and I was very pleased to see a clause that enabled us to take a tenant to tribunal on the basis of frequent late payment. So I really think that you should instruct your property manager to use this clause to enforce ontime rental payments.

It’s also a really good idea to have an agency who direct debits the tenants their rent each month or each fortnight because that means you’re establishing a situation where the money should be there. The tenant will expect to have that money from that account removed on the day that it’s due and sometimes even the day before.

So don’t put up with tenants in arrears, take action and I can assure you that they will come into line – but you do have to put pressure on.

Lisa Indge, managing director, Let's Rent 

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