Non-payment of rent

Key information

• Each tenant named on a tenancy agreement (lease) is legally responsible to pay the rent and may also be required to pay certain utility charges.
• Not paying rent or required utility charges, or being late in paying these charges, may mean the tenant can be given a termination notice, which could make it harder for them to rent another property in the future.
• It is very important that a tenant does not stop paying rent, even if they are not happy with something in their tenancy (for example, if the landlord or agent are not getting repairs done).
• There are ways to resolve disputes.

If a tenant stops paying rent

A tenant who does not pay the rent is in breach of the tenancy agreement.

There are a number of actions the landlord or agent could take if a tenant does not pay the rent.

For example:

• If a tenant is late in paying the rent, the landlord or agent should send the tenant a reminder letter of the overdue payment. The landlord or agent could also contact the tenant by telephone.
• If a tenant regularly pays the rent late, the landlord could discuss changing the method of payment such as an automatic bank transfer.
• If the tenant is experiencing hardship, a repayment plan could be set up where the tenant pays the landlord the outstanding rent over a period of time, on top of the normal rent payments.

Landlord or agents' rights and responsibilities

If a tenant falls more than 14 days behind with the rent, the landlord or agent can serve them with a non-payment termination notice, giving them 14 days to leave the property.

The notice must:

• be in writing
• be signed and dated by the landlord or agent
• state the address of the rented property
• give the day on which the tenant is requested to move out
• state that the reason for giving the notice is because the tenant is more than 14 days behind with the rent

include a statement informing the tenant that they do not have to leave if they pay all the rent owing or enter into, and fully comply with, a repayment plan agreed with the landlord.

A landlord can write their own notice or use our sample termination notice.

Tenants who catch up with their rent

There is a ‘general guarantee’ that a tenancy cannot be terminated due to late payment of rent, water or other utility charges if:

• a tenant catches up with payment of the rent and any utility charges owing, or
• a tenant is following, and complying with, a repayment plan agreed with the landlord.

If this happens after:

• a landlord has applied to the NSW Civil and Administrative Tribunal (NCAT), then the Tribunal cannot make a termination order and the tenancy will continue
• the Tribunal has given a termination order and the tenant has not vacated the property, the tenancy will continue. This means a landlord will not be able to enforce the order even if they already obtained a warrant for possession.

The exception to this is where the tenant frequently pays rent and/or water usage charges late. In that case, the Tribunal can make an order that a tenancy will definitely end, even if the tenant pays the charges they owe.

See also: Non-payment of water and utilities in rental property