arrears
📖 What is arrears? Meaning and definition
In New Zealand tenancy law, 'arrears' specifically means rent payments that a tenant has failed to pay by their due date. When rent is in arrears, it means the tenant owes the landlord money for rent that should have already been paid. This is a common issue that can lead landlords to apply to the Tenancy Tribunal for resolution.
The Tenancy Tribunal can order a tenant to pay rent arrears to the landlord. These orders often specify the exact amount owed and may include other costs like water rates or damages. Sometimes, the Tribunal may issue a conditional termination order, which means the tenancy will end and the landlord will get immediate possession of the property if the tenant fails to pay the arrears and ongoing rent by specified dates.
Payments made by the tenant are typically allocated in a specific order: current rent is paid first, followed by any outstanding rent arrears. If a tenant has significant rent arrears, the landlord may also seek to recover other costs, such as bond money, to offset the total amount owed. The Tribunal's decisions clearly itemise rent arrears as a distinct debt owed by the tenant to the landlord.
📋 Requirements
- Rent payment is due on a specific date.
- The tenant fails to pay the rent by the due date.
- The rent remains unpaid for a period, such as 21 days, before certain actions can be taken.
📝 Procedure
- Landlord applies to the Tenancy Tribunal for termination of tenancy and recovery of rent arrears.
- A hearing is held, which parties may attend by teleconference.
- The Tribunal determines the amount of rent arrears owed by the tenant.
- The Tribunal issues an order for the tenant to pay the rent arrears, often immediately or by a specific date.
- Payments made by the tenant are allocated first to current rent, then to rent arrears.
- If a conditional termination order is made, failure to pay arrears and rent by due dates can lead to tenancy termination and immediate possession for the landlord.
💡 Examples
- A tenant was ordered to pay a landlord $2,800.00 for rent arrears by a specific date, with ongoing weekly rent payments also required.
- A tenant was ordered to pay $9,064.29 in rent arrears, alongside other costs like water rates and cleaning, to their landlord.
- A Tenancy Tribunal order specified that a tenant owed $98.57 in rent arrears up to a particular date, in addition to various repair and cleaning costs.
- If a tenant fails to pay rent and rent arrears within two working days of the due dates, their tenancy will terminate, and the landlord will regain immediate possession of the premises.
❓ Frequently asked questions
What happens if I don't pay my rent on time?
If you don't pay your rent on time, it becomes 'in arrears'. Your landlord can apply to the Tenancy Tribunal to recover the unpaid rent and may seek to terminate your tenancy, especially if the arrears become significant.
How long does rent have to be overdue to be considered 'in arrears'?
Rent is considered in arrears as soon as it is overdue. However, specific actions, like a landlord applying for tenancy termination, often require the rent to be at least 21 days in arrears, as seen in some Tribunal cases.
Can the Tenancy Tribunal order me to pay rent arrears?
Yes, the Tenancy Tribunal can order you to pay any rent arrears you owe to your landlord. These orders are legally binding and often specify the exact amount and payment deadlines.
What is a 'conditional termination order' related to arrears?
A conditional termination order means your tenancy will end, and your landlord will get immediate possession of the property if you fail to pay your rent arrears and ongoing rent by the dates specified in the Tribunal's order.
If I make a payment, how is it applied if I have arrears?
Typically, payments are allocated first to cover any current rent due, and then any remaining amount is applied towards your outstanding rent arrears. This order of allocation is often specified in Tribunal orders.
Can my bond be used to cover rent arrears?
Yes, the Tenancy Tribunal can order that your bond be paid to the landlord to offset rent arrears and other costs you may owe. This is a common way for landlords to recover some of their losses.