Factsheet 05 [PDF]

As a tenant you have rights under the Residential Tenancies Act 2010 and Residential Tenancies Regulation 2010. This factsheet explains the law in NSW about rent arrears.

You must pay rent in advance

If you have not paid rent by when it is due, you are in rent arrears. This is a breach of your residential tenancy agreement.

You cannot be required to pay more than 2 weeks rent in advance.

You are told you are behind in rent

If the landlord/agent tells you that you are behind in your rent, do not ignore it. Check your rent receipts or other records to see if a mistake has been made.

If you are in arrears

If you can, pay the arrears immediately. Otherwise, contact the landlord/agent and try to come to an agreement about paying off the arrears over time. If you come to an agreement, send them a letter confirming this.

Make notes of any conversations you have and keep copies of all letters. This may be helpful if you have to go to the Consumer, Trader and Tenancy Tribunal (CTTT) at a later date.

If needed, seek help from a financial counselling service such as Credit and Debt Hotline (free call 1800 808 488). You can ask them to write a letter confirming your financial situation and your ability to pay rent and arrears.

No eviction without a CTTT or court order

If you are in breach of agreement solely for rent arrears and the landlord wants to end your tenancy, they can give you a non-payment termination notice (see below). The rent must remain unpaid for not less than 14 days before this notice can be given.

The landlord/agent does not have to ask you to pay the arrears before giving you a termination notice.

The landlord/agent must follow the process outlined below before you can be evicted. Locking you out without a CTTT or court order is illegal – the landlord/agent can be fined up to $22,000 and ordered to compensate you.

Termination for non-payment of rent

Non-payment termination notice

A non-payment termination notice must be in writing, signed by the landlord/agent and set out:

• the premises concerned
• the day by which the landlord/agent wants vacant possession of the premises – they must give you at least 14 days notice
• the ground for the notice – non-payment of rent.

The notice must also inform you that you are not required to vacate the premises if you:

• pay all the rent owing, or
• enter into, and fully comply with, a repayment plan agreed with the landlord.

The notice must be properly ‘served’ to you in person, by post, by fax, or hand-delivered in an addressed envelope to a mailbox at your residential or business address.

If the notice is posted, the landlord/agent must allow an extra 4 working days for delivery.

A termination notice alone does not end the tenancy. The landlord/agent must apply to the Consumer, Trader and Tenancy Tribunal (CTTT) for a termination order.

Application for a termination order

A termination order ends the tenancy and specifies the day on which you have to give vacant possession (you move out and return the keys).

The landlord/agent may apply for a termination order at the same time they give you a termination notice. However, the CTTT cannot consider the application before the date specified in the notice.

If you pay the arrears or fully comply with an agreed repayment plan, the CTTT cannot make a termination order and your tenancy will continue.

However, be aware that if the landlord applies for a termination order on the basis that you have ‘frequently failed’ to pay the rent on time, the CTTT may terminate your tenancy (even if you have paid the arrears).

Consumer, Trader and Tenancy Tribunal

Once the landlord/agent has applied to the CTTT, you will receive a notice of ‘conciliation and hearing’ telling you the date, time and place of the hearing.

It is important that you attend the hearing – even if you have already caught up with your rent or the landlord/agent tells you not to turn up.

Take to the hearing all letters, receipts and other evidence to support your case.

Conciliation (assisted negotiation)

The tribunal member will encourage you and your landlord/agent to resolve the rent arrears problem together in conciliation.

If you think the landlord has made a mistake about the rent arrears or with the termination notice, tell the conciliator or the tribunal member straightaway.

If you agree that you owe rent, you can make an agreement with the landlord/agent to pay it back over a period of time.

Explain your situation and show that you can pay off the arrears (e.g. show a letter from a financial counsellor). Do not offer to pay more than you can afford because if you then fail to meet the agreement, the landlord can then apply to the CTTT and your tenancy may be terminated.

If you and the landlord/agent cannot come to an agreement, your case will be heard by a tribunal member.

At the hearing

• Ask the tribunal member for time to bring your rent up to date and to allow you to continue your tenancy.
• Show the tribunal member all the letters or rent receipts that you have brought with you.
• Explain how much extra you can afford to pay per week.
• Tell the tribunal member about any hardship that you or your family may undergo if you have to leave your home.

The tribunal member will look at your evidence and the landlord/agent’s evidence. In considering the circumstances of the case, the member may consider:

• the nature of the breach
• any previous breaches
• any steps you have taken to remedy the breach (such as your attempts to pay off the arrears)
• the previous history of the tenancy.

The CTTT may refuse to make a termination order if it is satisfied that you have remedied the breach.

If the CTTT makes a termination order

The CTTT will consider the relative hardship to you and the landlord and specify the day on which you must give vacant possession.

If you are not out by the day specified, the landlord can get a warrant for possession from the CTTT and go to the Sheriff. A sheriff’s officer can remove you from the premises, with police help if needed.

If you pay the arrears or enter into an agreed repayment plan before the sheriff’s officer arrives, you can still save your tenancy. (You must notify the landlord that you have paid the arrears.) The landlord must then notify the CTTT and the Sheriff.

However, as stated above, the landlord may apply to the CTTT for a termination order on the basis that you have ‘frequently failed’ to pay the rent on time. The CTTT may terminate your tenancy.

Note: New tenancy law is effective

At the time of writing, it is not known how details of the new tenancy law will work in practice – particularly CTTT procedure. Contact your local Tenants Advice and Advocacy Service for advice.

January 2011

The information in this factsheet:
• is intended as guide to the law and should not be used as a substitute for legal advice
• applies to people who live in, or are affected by, the law as it applies in New South Wales, Australia.
© Tenants' Union of NSW.