Are you a landlord in Australia? Does your tenant owe rent; or are they constantly behind on rent payments? If you need help understanding your rights as a landlord, and what to do, Allen Law can help you – wherever you are located in Australia.

Non-payment of rent by a tenant can be a stressful experience for a landlord, as ordinarily, the landlord will have expenses associated with the property that they cannot postpone on the basis that they have not generated any revenue from the property, for example, mortgage repayments, strata corporation levies or local council rates. Accordingly, it is important that a landlord take appropriate steps, as soon as possible, to recover outstanding rental arrears, and the sooner this occurs, the better the prospects of recovering the unpaid rent.

In Victoria, a Landlord cannot take steps to obtain a possession order, and thereafter, evict the tenant, unless the tenant a notice to vacate (which is must be in the approved form), stipulating that, unless the tenant pays the rent owing, the landlord may apply to the Victorian Civil and Administrative Tribunal (the VCAT) for a possession order, along with compensation for loss of rent.

Under the Residential Tenancies Act 1997 (Victoria) (the Act), the landlord may only give notice to the tenant if the non-payment of rent is an occasion of non-payment of rent and the notice must not have a termination date less than 14 days after the date on which the notice is given.

An occasion of non-payment of rent is defined in the act to mean an occasion where the renter owes at least 14 days rent within a 12-month period of a residential tenancy agreement. However, it does not include any amount owing under a payment plan ordered by VCAT.

If the tenant pays the amount stipulated in notice to vacate then the notice is of no force or effect. However, even if the tenant does not pay, and the landlord commences proceedings in VCAT for a possession order, VCAT may still allow the renter to continue to reside at the property on the renter entering into a payment plan approved by VCAT, and thereafter, adjourn the possession order hearing.

The landlord must follow above steps on each occasion of non-payment of rent, until there has been a fifth occasion, in which case, the landlord can give the tenant a notice to vacate and even if the tenant pays the amount stipulated in the notice, to notice will still be of full force and effect, and the landlord pay apply to VCAT for a possession order. If this occurs on the fifth occasion, there is no ability for VCAT to order a payment plan, and ordinarily, the landlord, if proved that rental arrears are owing, will be entitled to, and VCAT will make, a possession order.

How do I obtain compensation for unpaid rent?

If the landlord has made an application for a possession order on the basis that the tenant has not complied with a notice to vacate on the basis of a failure to pay rent (whether or not that is on the basis of either a first to fourth notice to vacate, or the fifth), the landlord can, at the same time, apply to VCAT for compensation against the tenant for unpaid rent.

VCAT can then determine the amount of rent owing as at the date of the application and which is due and payable to the landlord, and further, order the Authority (that is, the bond authority) to pay to the landlord an amount of the bond as compensation for unpaid rent (whether or not that is the whole, or a part of, the bond).

A direction to the Bond Authority would only be appropriate where the Bond Authority actually holds money in the form of a bond on behalf of the landlord and tenant.

Is there a time limit?

Yes, if a possession order has been made under Part 7 of the Act on the basis that the renter has not paid rent, the landlord must make an application for compensation within 28 days after the date the renter has delivered up vacant possession of the property. Accordingly, it is important that, where a landlord seeks to recover compensation for unpaid rent, they do so without delay, and as soon as possible after they have obtained the possession order. Doing so increases the likelihood of recovering the unpaid rent.

What is a possession order?

A possession order is a formal order under the Act which a landlord requires in order to lawfully evict a tenant in Victoria (and ordinarily, a similar order is required in all Australia States and Territories). If a landlord evicts a tenant who is covered under the Act without a possession order, it will be considered an unlawful eviction and significant financial penalties can be imposed against the landlord.

How do I obtain a possession order?

You can only obtain a possession order if you are entitled to issue a notice of vacate on a specified basis under the Act, and that notice is valid.

However, a possession order can also be given in limited circumstances where a notice to vacate is not required, for example, where the property has been sublet without the landlord’s consent (albeit, that consent should ordinarily be given, as the landlord bears a burden of proving that withholding consent is reasonable), or where the property has been rented within 12 months from the date of an application, and the property is being occupied solely by a person who is not a renter under a residential rental agreement, and no license or consent was given.

I have a possession order, what do I do with it?

If you have obtained a possession order, you cannot enforce it yourself, rather, you must apply for a warrant of possession, and it must be applied for within 6 months from the date of the possession order.

A warrant of possession directs the police or an authorised person to enter upon the premises and compel, with force if necessary, the departure of all persons occupying the property, and to vacate and deliver up possession of the premises which is the subject of the warrant.

Do you need help obtaining a possession order, evicting a tenant, or compensation for unpaid rent? Contact Allen Law today

Allen Law regularly advises both tenants and landlords on all aspects of residential tenancy law in Victoria, and throughout Australia, on their rights and obligations under the law, and the appropriate practices and procedures which need to be complied with, depending on the circumstances of the case. If you need help, contact us today.

Phone:             (03) 7020 6563
Email:               enquiries@allenlawyers.com.au
Website:          www.allenlawyers.com.au

Disclaimer: This article is general in nature and does not constitute legal advice. Please contact Allen Law for advice tailored to your particular situation