When a tenant signs a Residential Tenancy Agreement they agree to pay the rent in full fortnightly or monthly in advance. However, in reality, no action can be taken by the property owner or their agent until the rent remains unpaid for more than fourteen day other than constant reminders usually by sms, phone calls, emails and normal mail.
A Notice to Vacate can be served upon the tenant on the fifteenth day allowing them another fourteen days to pay the outstanding rent or vacate the property. Here lies the trap; should the tenant decide to vacate within this time period and pay rental up to date they vacate, the Fixed Term Agreement is negated and no further action can be taken against the tenant unless the property is left in disrepair. This long standing loop-hole in the legislation allows savvy tenants to renege on their obligations under a Fixed Term Tenancy Agreement without penalty.
This further emphasizes the need for comprehensive Landlord insurance as a representative from EBM Insurance confirmed that this would be covered as a lease break. This is subject to the policy being in place prior to the tenant falling into arrears, a current tenancy agreement and a bond held by the Residential Tenancies Bond Authority.
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