Understanding Section 299 – Repeated Breaches
The start of the year is often one of the busiest periods in property management. Typically, there are multiple entry and exit reports to complete, and it’s not uncommon for rent arrears to start creeping in. If this is the case, you may have a tenant that’s repeatedly breaching part of the agreement.
The REIQ’s Property Management Support Service has received multiple queries about repeated breaches in the past couple of weeks, so we’ve taken this opportunity to answer some frequently asked questions on this topic.
Q: How many breach notices do I need to issue for rent arrears before issuing the Form 12 to the tenant?
A: The simple answer is there is no prescribed requirement under the the RTRA Act to issue a certain number of Notice to remedy breach forms (Form 11) before issuing a Notice to leave form (Form 12). The process for dealing with a breach of the General Tenancy Agreement (Form 18a) and any special terms associated with the relevant agreement or the RTRA Act is to issue a Form 11.
For example, rent arrears, the tenant must be seven clear days in arrears before an agent can issue a Form 11. From there, one of two scenarios can occur:
The tenant pays the rent owing at the time the Form 11 was issued by the due date. You must allow seven clear days for the tenant to remedy the breach. Once the tenant has remedied the breach, the property manager can take no further action.
The tenant fails to pay the rent owing at the time the Form 11 was issued by the required due date. The lessor/agent then has two choices:
(a) Issue a Form 12: For rent arrears, the agent/lessor must give the tenant seven days’ notice to hand the premises over. For any other breach, the agent/lessor must allow the tenant 14 days to hand back the premises. If the tenant fails to hand the premises over by the due date, the next step is to make an Urgent Application seeking to terminate the tenancy due to Failure to Leave (Section 293 of RTRA Act). The lessor/agent must submit this application within 14 days of the handover date.
(b) Tolerate the unremedied breach and take no further action: If the tenant has paid some of the rent (but not all of the outstanding rent), the lessor may decide to tolerate the unremedied breach. If no further action is taken to end the tenancy due to the unremedied breach, then you cannot rely on this breach notice to take any further action at a later date.
Q: What happens if a tenant remedies the breach and then is in arrears again?
Familiarise yourself with restrictions imposed by Section 299 of the RTRA Act which deals with repeated breaches. It is important to have proper systems in place which allow you to determine when its appropriate to issue a Form 12 or when an owner can apply to a tribunal for a termination order.