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March 29, 2021

What can you do if a tenant refuses to move out?

Being a landlord has its advantages and disadvantages. On the positive side, owning property and having a passive source of income improves your financial position. It increases your estate’s net asset value and benefits your cash flow.

However, becoming a property owner also has its disadvantages. You need to maintain your asset and repair any damage. There are also additional monthly expenses, such as rates, taxes, and levies you need to pay.

Nevertheless, the benefits of being a landlord far outweigh any disadvantages. Owning a rental property is a financially rewarding investment that can allow you to leverage your borrowing power as well as tax deductions to create cash flow. Over time, as your property’s value increases, it also benefits the asset line on your balance sheet, creating equity and wealth.

However, all the positive financial advantages of being a landlord depend on your tenants. Having your rental property occupied by individuals that damage it or do not pay their rent can put a strain on you both financially and emotionally. In circumstances where the relationship between landlord and tenant breaks down, eviction may be the only option. This legal process requires the tenant to vacate the property willingly after being served with proper notice. In some cases, the tenant may take exception to the termination of the tenancy.

This situation is far from ideal, so what can you do if a tenant refuses to move out?

 

A breach of the tenancy agreement can lead to an early terminate of a lease agreement

Many scenarios could lead to a landlord asking a tenant to vacate their property. Overdue rent, damaging the property, or any other infraction that breaches a material clause are all grounds for the landlord to start the process of taking back possession and seek damages. However, it is essential to note that landlords can only begin an eviction process if the tenant breaches the tenancy agreement. The landlord cannot unilaterally end the lease unless they follow the due legal process or come to an agreement with the tenant.

 

Eviction should be your last resort

One of the most significant contributing factors to the early termination of a lease agreement is overdue rent. Ideally, your property manager should have a system in place to pick up on any rent arrears as they occur. An effective rental monitoring system that communicates with the landlord and tenant proactively can alert both parties to any potential issue before it becomes a problem. By working with your tenants, you and your property manager, you can work towards resolving any late payments. There may be valid reasons for the missed deadline. The tenant may have genuinely forgotten, or there may have been a processing error with the bank. Either way, it is always better to try and resolve the problem than start the process of removing the tenant.

 

The eviction process

When a landlord wants to evict a tenant, they must follow due legal process. You cannot unilaterally evict or force anyone out of your rental property, no matter the circumstances, unless you follow the correct procedure.

 

Termination of tenancy agreement due to non-payment of rent

Under the tenancy agreement and the Residential Tenancies Act WA, the landlord can serve the tenant with a termination notice. The landlord can follow two separate procedures: the Western Australian Government’s “Renting out your property – a lessor’s guide” details in its appendices.

 

Option 1 – Service of a Breach notice for failure to pay rent

This option gives the tenant time to remedy their overdue rent and remain in the property. If the landlord wants to use this legal avenue, they need to adhere to the following steps and timelines.

  • 1 day after rent is due: Serve the tenant with notice of the breach. Breach Notice for Non-payment of Rent (Form 21).
  • 15 days after rent is due:If the rent is still in arrears, the landlord can serve the tenant with notice of termination for non-payment of rent. Notice of Termination for Non-payment of Rent (Form 1A).
  • 8 days after notice of termination: The tenant has seven days to vacate the premises. On the 8th day, the lease is terminated.
  • 9 days after notice of termination: If the tenant has still not moved out, the landlord can apply to the Magistrates Court within 30 days from this date. If the court finds in favour of the landlord, it will issue an order terminating the tenancy and giving possession of the premises back to the property owner.

 

Option 2 – Service of Notice of termination for failure to pay rent

This alternative option gives the landlord the recourse to terminate the lease and evict the tenant without giving the tenant time to remedy the overdue rental. If the landlord wants to use this legal avenue, they need to adhere to the following steps and timelines.

  • 1 day after rent is due: Serve the tenant with notice of termination for non-payment of rent. Notice of termination for non-payment of rent (Form 1B).
  • 8 days after notice of termination: The tenant has seven days to vacate the premises. On the 8th day, the lease is terminated.
  • 9 days after notice of termination: If the tenant has still not moved out, the landlord may apply to the Magistrates Court within 30 days from this date. If the court finds in favour of the landlord, it will issue an order terminating the tenancy and giving possession of the premises back to the property owner.

 

Option 3 – Service of Breach notice other than for failure to pay rent

In some instances, the landlord may serve notice to a tenant due to a breach of a clause in the tenancy agreement. This option is for violations other than a failure to pay rent. Damaging the property, not maintaining the garden, or breaking contracted rules are examples. If the landlord wants to use this legal avenue, they need to serve the tenant with a breach of agreement form. Notice to Tenant of Breach of Agreement (other than failure to pay rent) (Form 20).

As with the failure to pay rent process, the landlord has two options if the tenant does not remedy the breach within 14 days. Either give the tenant time to fix the violation after the 14-day period has passed or move to terminate the lease immediately.

 

What can you do if the tenant refuses to move out?

If the tenant receives the termination notice and refuses to move out, the landlord can seek a court order. A bailiff can then enforce this court order by obtaining a warrant from the court authorising them to evict the defaulting tenant.

However, if the court issues the order and the tenant believes they are likely to suffer hardship due to the eviction, they can petition the court to suspend the order for up to 30 days. The tenant also has further protection under the Residential Tenancies Act 1987. If the tenant believes any action to evict them is due to complaints made to a public authority or other steps taken to enforce their rights, they can remain in the property until the court decides the matter.

 

Protecting your property with Landlord Insurance

During the period a tenant has not paid rent, the landlord still needs to pay the relevant expenses for their investment property. As this period with no income may extend into months, the financial implications are far from ideal, especially if there is a mortgage to pay. Landlords that do not have insurance run a significant financial risk. However, having this protective measure in place can give you peace of mind.

Landlord insurance can mitigate the financial and emotional burden of any unplanned investment property challenges that may arise. Having this insurance in place will cover your expenses while a tenant refuses to move out.

 

HERE to help

If you’re looking for a proactive property manager to help guide you on your options, we’re HERE to support you along the way.

Contact the HERE team to discuss how we can help you maximise your property’s potential while minimising risk with a tailored approach focused on your goals.

 

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