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Melbourne Real Estate Weekly Recap. Episode 4 - Rental Arrears

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Weekly Recap
Tim Ash
Tim Ash
August 4, 2022
minute read

What is the process when my tenant falls behind in rent?

What are my rights as an owner?

Rent arrears, what are your rights as an owner?

When your tenant falls behind what are the next steps to take?

Once your tenant falls 14 days behind in rent you can thenissue them with a 14 day notice to vacate, this gives the tenant an extra 14 days to either give us back possession or to pay the rent

in full.

One of three things can happen here they can either give us back possession of the property and we're now in possession so we can re-marketfor another tenant.

This is the ideal situation you can minimize your losses,get a new tenant in and start getting a rental return.

Second option is that they can pay the rent in full,  if they pay the rent in full it makes thenotice to vacate voided,  throughout afixed term tenancy let's say the tenant does it a second time, third time, fourth time they can have up to four times to fall 14 day behind, they do it the fifth time wecan then make the application to VCAT and get possession if there's a pattern of this happening.

Third option is you don't hear anything, they haven't paidthe rent or they've only paid part and you can then make an application for rentand possession at VCAT.

Once you have the hearing at VCAT one of three scenarios will be granted by the member:

Firstly rent and possession of the property  this would be the ideal outcome is that vcat grants you with a warrant of possession, you can claim the bond for the back rent and with the warrant of possession you can take it down to the local police station, the police will then book in an eviction date, you bring the lock smith with you and then get the locks changed.

Scenario number two is they can put the tenant on a payment plan,this would be a likely scenario if the tenant has shown constant efforts in terms of paying the rent and trying to catch it up.

Scenario number three which is not ideal at all is they can actually send the tenants to financial counselling and adjourn the hearing.

Then you get the financial counsellor's report and advice onbest steps forward which is not an ideal situation at all.

It’s our agency’s job to get the best outcome for our landlords/rentalproviders so howdo we do that?

We need to ensure that we've got constant communication withthe tenants being text messages, phone calls, emails, they must be logged and dated for the hearing.

Ideally it would also look good if the landlord was willing to enter into a payment plan prior to it going to a hearing to show some good will between the owner and the tenant.

Another advantage of doing this is when you actually get to thehearing if VCAT do offer the tenant to enter into a payment plan you can say that you’ve already tried to go down that path and it hasn't worked out.

Another item that would assist would be a stat deck highlighting hardship on yourselves as owners, how the lack of rent or no rent has impacted your personal situation.

I believe VCAT will take this into consideration particularly after COVID.

It’s also worth keeping in mind that the outcome of thehearing will come down to the VCAT member that is hearing the case at the time.

I really hope you have enjoyed this weeks episode on rental arrears.

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