FAQs: Notice to Remedy Breach (Form 11)

Property Management,  Property Managers

The Property Management Support Service (PMSS) team fields up to 100 calls a week from REIQ members seeking clarity on certain topics – with Form 11s the trending topic of late. Have a topic you’d like us to cover in an upcoming edition of the PM Update? Email us at pmsupport@reiq.com.au!

 

Q: Do you need to issue two breach notices before you can issue a Notice to Leave?

A: No. If a tenant breaches the Agreement (Form 18a, either a standard term or a special term) or the RTRA Act you can issue a Form 11 Notice to Remedy Breach (NTRB). For rent arrears, the tenant must be seven clear days in arrears before you can issue the Form 11. Once you issue the Form 11, you must allow the tenant seven clear days to remedy the breach. If the tenant doesn’t remedy the breach, the next step is to issue the Form 12 Notice to Leave. For rent arrears, you must allow the tenant seven clear days to hand the property over and for any other breach, you must allow 14 clear days.

If the tenant didn’t remedy the breach and the owner instructed you, in writing, not to proceed with issuing the Form 12, no further action could be taken on this breach notice other than keeping a record on the file. The Act allows for a Form 12 to be issued to seek to end the tenancy but the owner can elect not to take this action, indicating they’ve tolerated the breach and allowed the tenancy to continue.

 

Q: I have heard there has to be repeated breaches by the tenant before you can issue the Form 12.

A: This isn’t true. As stated above, regardless of whether it’s the first time the tenant breaches the Agreement or Act, if they don’t remedy the breach the next step is to issue the Form 12. The difference is if the tenant actually remedies the breach. This is where it is important to understand section 299 of the RTRA Act and repeated breaches. If the tenant remedies the breach, this means no further action can be taken at that stage as the breach has been remedied.

Let’s say for example that you issue the tenant a Form 11 for rent arrears. On the day of expiry of the Form 11, the tenant provides evidence they have paid the amount owing on the Form 11 although no further rent. Rent is considered to be paid when it has been transacted from the tenant’s bank account. They have remedied the breach and no further action can be taken for that Form 11. Within a day or so, this tenant is seven clear days in arrears again. You issue the Form 11 and the same process is followed – the tenant pays the amount owing on the Form 11 on the day of expiry. No further action can be taken on this Form 11.  Once again, within days the tenant is seven clear days in arrears. This is where you need to understand what repeated breaches means. As you have issued two breach notices for the same provision, on the third breach (which must be within 12 months) you can apply directly to QCAT on an Urgent Application seeking to terminate the tenancy due to repeated breaches (section 299). This means on the third breach you do not issue a Form 11, you apply directly to QCAT seeking to terminate the tenancy.

Remember, you can only rely on section 299 if the tenant remedies the first two breach notices.

The repeated breaches provision are specific to;

  • section 184 tenant’s use of premises;
  • section 188 tenant’s obligations generally; or
  • a provision of an agreement providing for the payment of rent

 

Q: If the tenant has breached more than one standard of special term how should I handle this?

A: There’s no prescribed wording for Part 4 of the Form 11, although it’s critical the specific standard or special term is stated clearly so the tenant knows what they have breached and what action is required to remedy the breach. If you issue the Form 12 and the tenant doesn’t hand the property over, you’ll need to apply to QCAT to seek a Termination Order.  If you haven’t been specific on the Form 11, it could compromise the success of the Order you are seeking at QCAT.

 

If there are multiple breaches you could do either of the following;

1. Reference an attached Annexure in Part 4 and detail each specific breach, i.e. standard or special term breached and action required to remedy, separately.

2. Issue a separate Form 11 for each specific breach and in Part 4 state what part of the Agreement was breached and what action is required to remedy the breach.

 

RELATED ARTICLE: WHAT’S SO SPECIAL ABOUT SPECIAL TERMS?  

 

Q: I have just completed a routine inspection and the tenants aren’t looking after the yard. They’ve also made one of the smoke alarms non-operational. I can’t see in the Form 18a a standard term I can breach them for – can you help me find it?

A: That’s because there isn’t a standard term which covers these. You need to carefully read the special terms of the Form 18a the tenant has signed. For example, if you use the Realworks or One Touch Execution version of the Form 18a, you can rely on a legally drafted special terms.

In Part 4 of the Form 11, you’d reference Special Term 47 (1) (d) which states: “during the tenancy the tenant must, maintain the lawns and gardens at the premises having regard to their condition at the commencement of the tenancy, including mowing the lawns, weeding the gardens and watering the lawns and gardens (subject to council water restrictions).”

For the smoke alarm you’d reference Special Term 47 (1) (j) which states: “during the tenancy the tenant must not interfere with nor make non-operational any facility that may be provided with the premises (e.g. smoke alarms).”

 

Q: I have just completed a routine inspection and the tenants have a dog they haven’t got approval for. What do I put on the breach notice?

A: There is a standard term of the Form 18a in relation to pets, so you would first check the Form 18a, Item 17 and determine what was agreed to in the agreement for pets. If the tenant has a pet that wasn’t agreed to, you would reference Item 17 and standard term 24 (1) (2).

 

Best Practice Tip:

Whenever you believe the tenant has breached the Agreement, always check the Standard Terms first and if the issue isn’t covered in a Standard Term, check the Special Terms of the Agreement the tenant has agreed to.

 

Q: I want to go back and do an inspection to check if a breach has been remedied but the tenant is saying they won’t allow access. What can I do about this?

A: Entry to premises to check if a breach has been remedied can only occur if the breach is significant or by mutual agreement with the tenant. Entry can occur within 14 days after the end of the allowed remedy period by providing the RTA Form 9 with 24 hours’ notice.

 

A significant breach means a breach relating to any of the following;

  • using the premises for an illegal purpose;
  • the number of occupants allowed to reside in the premises;
  • keeping a pet on the premises; or
  • another matter, if the reasonable cost of rectifying the matter exceeds 1 weeks rent for the premises

 

Q: If the tenant hasn’t remedied a Breach and it expires what is the timeframe in which I must issue the Form 12?

A: There isn’t a timeframe stipulated in the RTRA Act. The Form 12 is a consequence of the Form 11 not being remedied, so if the matter proceeded to QCAT you would need to demonstrate you issued the Form 12 in a “reasonable” amount of time. Our best practice advice is to issue the Form 12 on the first business day after the Form 11 expires, otherwise you’ll require supporting evidence as to why there was a significant time lapse from the Form 11 expiring to issuing the Form 12. An example of this could be you needed to reinspect the property due to a significant breach to assess if the breach had been remedied, before issuing the Form 12.

 

REIQ Members seeking further advice on this topic or any other property management topic can call the PMSS Team on 1300MYREIQ (1300 697 347) or email pmsupport@reiq.com.au. Not a member? Join us today!

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