Landlords and tenants don’t really have much to dispute. Not getting the toilet fixed for 6 weeks is not a dispute. You are just a bad landlord. Taking a tenant to the tribunal because they have punched holes in all your walls is not a dispute. They have broken the terms of the lease and must leave. No dispute. No need for you to enter into that negotiation. Let the authorities take care of that for you.
Unpaid rent is the only real dispute
Your financial situation may lead you to impose undue pressure on your tenants when they fall behind in rent payments. If going without rent for a few months would be financially crippling you should review your investment strategy.
Get one by clicking here. Start things off by taking time to fill out all the paperwork correctly. Get it all down in writing. That will take care of any “he said, she said, I said” arguments later. The residential tenancy agreement will clearly state all the obligations of each party. All procedures relating to major and minor repairs, keeping the pool clean and landlord’s inspections are all covered in your residential lease.
Emphasise to your tenant that by signing the lease agreement you are both entering into a legal contract. Shake hands and look each other in the eye. Congratulate your new tenant. It doesn’t really matter about the paperwork. You have both just given your word, your bond, to work together. Whatever happens during the term of your agreement you will always remember the relationship you share, be it good or bad.
If a problem arises at any point in the tenancy where you find yourself reaching for your signed copy of the lease, things are probably too far gone for what it says on paper to matter. Things are probably going to be sorted out by a magistrate with or without your intervention. The magistrate is not really interested in the fine detail of the lease. On the one occasion I took a tenant to the tribunal the magistrate did not even turn one page of my specially prepared lease. He just made his ruling and out I walked to wait another 21 days before I could get the sheriff to ride in on his big white horse.
The only thing you will ever really find yourself negotiating is getting your rent. Tenants fall behind in rent for lots of reasons. When you rented you were probably behind on a few occasions. Things usually sort themselves out. Sometimes you will need to intervene.
If your tenant falls behind in their rent – have a plan for approaching the situation calmly. These steps will help.
1. Wait 48 hours. The first time your tenant falls behind wait 48 hours before contacting your tenant. Things like weekends and public holidays can mean small delays so no need to jump on your tenant instantly.
2. Send a polite SMS and email. I just love technology. Sending a text message via SMS to your tenant will in most instances get an immediate resolution. Something like. “Just wondering when we can expect rent”. Don’t abbreviate the words. No aggression. Remember to include your name. This is usually the end of it.
3. Make a phone call. If you have received no response to your SMS or email within 24 hours ring your tenant. The chances are very high they have received your message by now and are avoiding dealing with the situation. They will be uncomfortable and embarrassed and expecting your phone call.
Be calm in your approach. Start off with their name and something like “Bill, I noticed you are a little behind on your rent at the moment. How are we going to sort this out?” Wait for them to respond. Most times they will offer to catch up by next week. Sometimes they might ask to spread the arrears over a few weeks or a month. My goal is to have a happy outcome for both of us. I usually take them at their word, confirm the amount to be deposited on the date they have specified, confirm the method of payment, thank them and hang up. I then send them an email and an SMS confirming their agreement to pay the outstanding rent. A vast majority of situations are sorted by this phone call.
4 Don’t argue with your tenant. You just won’t win any argument. The only goal is to negotiate some kind of outcome acceptable to both parties. It might mean working out a payment plan or maybe ending the tenancy now. You must reach an agreement. So work hard to keep things amicable and keep coming back to the fact you must have a resolution by the end of this phone call. Don’t get side-tracked by your tenant talking about the oven or the flyscreen’s. That is a separate issue. First completely resolve the outstanding rent situation.
Just a note: When a tenant want to end the lease before the contractual end of the agreement I always agree. Regardless of the terms of the Residential Tenancy Lease Agreement I am happy to assist them out of the place. Why would you force someone to live in your property when they don’t want to. This is just asking for trouble.
5. Contact their next of kin. If a week has gone by and you can’t raise a reply of any kind from your tenant, ring their next of kin. Unless they are in hospital, in jail or overseas they have probably received your SMS and avoided your phone calls. Ring their next of kin. Introduce yourself saying you are the landlord of the property where their kin are living and your tenant gave them this number in case there was a need to contact them. Ask to speak to the person you have recorded as their next of kin. If the person who answers the phone says they can help you, first establish their relationship with your tenant. If you feel it is appropriate to continue tell them you have been trying to contact them for a little while and can’t seem to find them. Are they able to get a message to your tenants to ring you?
Do not say anything about overdue rent or anything negative about your tenant. You are likely speaking to their mom or dad or a brother or sister. Even if they start saying derogatory things do not enter into that. If you do, I guarantee you they will tell them that you said blah, blah, blah. It serves you no purpose.
You know what happens next. Mom or Dad get straight on the phone to your tenant to tell them you rang. Often this leads to a quick resolution. Mom lends them the money, your tenant pops it in your bank and all is sorted.
6. Knock on the door. If more than one week has elapsed it is time to knock on the door. You have probably already driven past by now to make sure they are still living there.
If they answer the door be friendly and calm. Try to keep sarcasm out of the conversation. I find that really hard sometimes but saying you dropped by to make sure they are not dead is not the best way to start. Your only goal is to arrive at a mutually acceptable outcome
If they are not home, send them a registered letter of demand to bring the rental arrears up to date. Specify time frames to comply. State your next course of action if your demands are not met.
If you know they are home and are just not answering the door, things are way beyond the negotiating point. No reason to get upset. Just go home and commence legal proceedings. First send them a registered letter asking them to contact you to resolve the overdue rent problem. Give them a deadline stating your next steps if they refuse to comply. Make sure the various time frames comply with your residential tenancy agreement and the law in your state. Do not make any idle threats. If the date comes with no resolution commence proceeding immediately. With luck you can get them out quickly and the bond may nearly cover the rental arrears.
7. Send the boys around. Sometimes you need to send in the heavies. When all else fails you need to involve the government in your cause. You want to avoid this measure if you can. It means filling out forms, standing in queues, having public servants look at you like the evil slum lord you really are. Get through that and you have to give up a day to go to a tribunal hearing. Whether the tenant shows up or not it is likely they will be given a few weeks to vacate. If they haven’t gone on that date you need to apply to get them evicted. The Sheriff will ride up on his white horse, guns a blazing and take possession of your property on your behalf.
You can see there is just nothing good about this scenario.
8. Don’t take services for rent. Don’t allow yourself to be drawn into a situation where your tenant offers services in lieu of the outstanding rent. The tenant says something like ” I owe you a couple of week’s rent. The place needs painting. You buy the paint and I’ll supply the labour”. This is just asking for trouble. You really need to get invoices for all of your expenses in order to claim them against your income. You are not supposed to give anyone payment for services without a tax invoice and if they do not have an ABN you have to withhold tax and send it to the ATO. You can be sure the job will not be up to the standard you expect and you do not have any legal way to get it rectified. Best to leave this one alone.
Work hard to settle disputes with your tenant. Most people are good people and the likely outcome of any negotiation between landlord and tenant will be favourable to both parties.
