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Landlords, Get Your Rent Paid Promptly!
A landlord client of ours recently came to us because tenants in his building were continually paying their rent late. Since the tenants had signed up he had had to follow them up with phone calls and letters each month until they finally got around to paying the rent. If this sounds familiar, then read on …
A new legal process is available to enforce payment of rent by tenants. Previously, when tenants had breached the lease by not paying rent, the landlord could take possession of the premises, sue the tenants, or enter the premises to uplift the tenant’s chattels to pay for the rent. These options were not always practical and were difficult to follow through.
Now the landlord can give notice of the breach as soon as the rent is overdue, and ten days after that can cancel the lease. A notice under the new Property Law Act that the landlord requires the rent to be paid is a quick and relatively easy way of getting tenants to pay outstanding rent. There are specific requirements under the Act as to what the notice must spell out including exactly how much is owing and how long they have to pay the rent. The landlord must give the tenant not less than ten working days to pay it. Once the period specified in the notice has expired, then the landlord is entitled to cancel the lease. A tenant who will happily ignore letters seeking payment may sit up and pay attention if a formal notice under the Act is received that stipulates cancellation if the outstanding rent is not paid.
The notice period (of at least ten days) can start running prior to the rent being in arrears for ten days, so you do not have to wait a whole month until you can do anything about non-payment of rent.
Many landlords, like our client, will no doubt find that this new addition to the law surrounding leases will be a helpful tool in ensuring their tenants abide by their agreement under the lease to pay the rent on time. It is better for tenants too!
Now, instead of facing the inconvenience and cost of being locked out without notice (as could happen before the new Act) they now receive notice of the risk of having their lease cancelled. However, if the tenant still does not pay and the landlord follows through and cancels the lease, the tenant will be liable to the landlord for damages (generally the total losses to the landlord arising from the cancellation of the lease).
Did You Know …?
On the subject of landlord remedies, the law has also abolished the right of “distraint”. The right of distraint allowed the landlord to enter the premises and take the tenant’s goods if rent had not been paid. There were strict rules regarding the process and the landlord had to follow in using this self help remedy. Many landlords have been tripped up over the years for not carrying out the process correctly. Landlords need to be aware that they no longer have this right.