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NCAT and non-payment of rent

27 July 2016

Keeping accurate and reliable records are critical for property managers who need to prepare for an NSW Civil and Administrative Tribunal (NCAT) for the non-payment of rent.

Property managers have to be experts in many areas, but ensuring tenants pay the rent is one of the most important. 

Tim Anderson represents REINSW on the NCAT Liaison Group and Consultative Forum. He recommends gathering as much evidence as possible from every conversation with clients to ensure you are prepared for all eventualities.

He said: “If you’re not a good record keeper, get out of property management because it’s the lack of records and information which will trip you up.

“A simple recording of conversations can be vital evidence if you finish up at an NCAT tribunal.”

Applying to the NCAT tribunal

The Residential Tenancies Act 2010 makes the payment of rent an essential part of a tenancy and failure to pay rent is a breach. If this situation occurs property managers can apply to NCAT for a termination of a contract.

Tim said: “NCAT treat the non-payment of rent very seriously and there is a priority to agencies looking for termination of non-payment to prevent any unnecessary delay.

“One thing to look out for when serving a termination order form is a section which asks if you would still like to proceed if the tenant pays the rent.

“This is because if you don’t fill in this section, the tenant can still pay the outstanding rent at any time in the process, right up until the tribunal, which brings the matter to an end.”

Property managers should download a document from NCAT called ‘hearing notes’ which helps put together your case and avoid any mistakes. 

Tips about serving a notice for arrears

NCAT looks for proof of serving a notice and so it is best to try and hand deliver itand send a text message or email to confirm this to the tenant. NCAT does accept text and email as proof of communication, but you cannot serve a notice by text or email alone. 

Any error in calculations of the non-payment of rent can mean an application to NCAT would fail because the jurisdiction of the tribunal has been removed.

Tim said: “The dates involved are the most important part so get someone in your office to check it and, if you have any doubt, add an extra day before you send the notice out.

“One mistake which is often made during a longer tenancy is that there may have been increases of rent, and you need to take evidence that this has been properly served.”

It is worth remembering that once you have filed your case you cannot add any new evidence on the day.

NCAT hearing

You should have a print-out of the arrears to hand on the day of the hearing. If the tenant does not turn-up you can still make a request that the matter is heard. 

If everyone is present, the tribunal instructs you to go to the conciliation room to try and resolve the issue.  However, deals agreed in the conciliation room do not bind you and are private.

Tim said: “The biggest mistake you can make as an agent is to say you are not negotiating and that the landlord wants the tenant out.

“If you refuse the conciliation process, the matter is dismissed or adjourned - and I have seen many cases where they ask agents to bring the landlord with you.

“As a back-up you should get instructions from your landlord so that there is some flexibility in the conciliation room.”

He added that you should not spend too long in the conciliation room because if too much time has lapsed the case can be adjourned to another day. 

It is also good practice to get the tenant to sign any deal agreed in case they have to rush away after and are not present to verify it.

If an NCAT member decides that you can terminate the contract, you have to deliver a copy of the order to the tenant by 6pm on the day of the hearing.

For more information, watch the recorded webinar with Tim Anderson and Jo-Anne Hamilton here.