repayment plan
📖 What is repayment plan? Meaning and definition
In New Zealand tenancy law, a repayment plan is often established by the Tenancy Tribunal, particularly when a tenant has significant rent arrears. It outlines specific payment amounts and frequencies for the tenant to clear the outstanding debt while continuing to pay their regular rent. These plans are frequently part of a 'conditional termination order', which means the tenancy will end if the tenant fails to meet the agreed-upon payments.
The purpose of a repayment plan is to provide a structured way for tenants to address their debt, potentially allowing them to retain their tenancy if they comply. Landlords benefit by having a clear schedule for recovering owed money. The Tribunal considers factors like the tenant's financial situation and their commitment to the plan when deciding whether to grant such an order, sometimes even granting suppression of details if the tenant is committed to compliance.
Should a tenant breach the terms of a repayment plan, for example, by making a payment late, the conditional termination order can be enforced, leading to the immediate termination of the tenancy and the landlord regaining possession of the property. The plan specifies the exact amounts and dates for payments, ensuring both parties understand their obligations. It's a formal arrangement designed to resolve debt disputes within a tenancy.
📋 Requirements
- The tenant has significant rent arrears or other proven debts.
- The tenant proposes a plan or accepts a plan set out by the Tribunal.
- The plan specifies weekly or fortnightly payments towards the debt in addition to regular rent.
- The tenant must comply with the payment schedule, including due dates.
- The plan is often part of a conditional termination order, meaning non-compliance can lead to tenancy termination.
📝 Procedure
- An up-to-date rent ledger shows the amount of rent owing.
- The tenant acknowledges the debt and proposes a repayment plan, explaining their financial situation.
- The Tenancy Tribunal considers the proposal and the tenant's commitment to pay.
- The Tribunal issues a conditional termination order, detailing the specific repayment plan.
- The tenant must make regular rent payments plus additional payments towards the debt by specified dates.
- If payments are late, the tenancy may immediately terminate, and the landlord can enforce a possession order.
💡 Examples
- A tenant owing $8,350 in rent arrears proposes to pay $1,000 per week towards the debt, in addition to their regular rent, until the full amount is repaid.
- A Tenancy Tribunal order specifies fortnightly payments of $614, which includes $536 for regular rent and $78 towards a $3,105.26 debt, starting on a particular Thursday and continuing every second Thursday.
- A landlord reduces the weekly rental to $1000, and the tenant agrees to a repayment plan for water bills and rent arrears, with the understanding that the tenancy will terminate if payments are not made within two days of the due date.
- A tenant, having resolved employment issues, commits to a repayment plan for significant rent arrears, leading the Tribunal to grant a conditional termination order that will lapse if fully complied with.
📚 Legal basis
- Residential Tenancies Act 1986
❓ Frequently asked questions
What happens if I miss a payment on my repayment plan?
If you miss a payment or pay more than one working day late, the tenancy may immediately terminate based on the conditional termination order, and the landlord could gain possession of the property.
Can a repayment plan include other debts besides rent?
Yes, the case excerpts show that a repayment plan can include other proven claims, such as water bills, in addition to rent arrears.
How is the amount of the repayment plan decided?
The amount is often proposed by the tenant, considering their income and employment situation, and then formally set out in an order by the Tenancy Tribunal, specifying how much is for regular rent and how much goes towards the debt.
Will my tenancy automatically end if I have rent arrears?
Not necessarily. If you agree to and comply with a repayment plan set out in a conditional termination order, the order will lapse, and your tenancy can continue. However, non-compliance will lead to termination.
Can my personal details be kept private if I agree to a repayment plan?
The Tenancy Tribunal may grant suppression of your name and identifying details if you are committed to complying with the repayment plan and provide an explanation for the arrears, especially if the landlord supports the application.
What if my financial situation changes after a repayment plan is ordered?
The excerpts do not directly address changes to a repayment plan after it's ordered. If your financial situation changes, it would be prudent to seek legal advice on whether the order can be varied or if other options are available.