How to Deal with a Tenant in Rent Arrears

Before a tenant moves into your property, they are asked to sign a lease. This acts as an agreement on their part, that they will pay the rent requested and do so on time. If a tenant fails to meet their contractual obligations and does not pay their rent, they are said to be in “rent arrears”. When rent is not being paid it is a breach of the tenancy agreement signed by the tenant entering the tenancy.

There are two methods of dealing with tenants in rent arrears. One applies if the reason they find themselves unable to pay is a direct consequence of Covid-19 (see steps 1-7) and the other method applies when the reason they are in arrears is not a consequence of Covid-19 (see steps 8-10) .

When a tenant is in rent arrears as a consequence of Covid-19

Since the Covid-19 pandemic, new legislation has come into place detailing how a landlord should deal with a tenant who is rent arrears. This new legislation is expected to remain in place until at least January 12th 2022, and possibly beyond. This 10-step process should be followed carefully and accordingly so that the landlord does not find themselves in breach of the rights of the tenant.

What are the steps to take?

Step 1

A landlord must issue a warning notice to the tenant to pay back any rent arrears accrued.  This will give the tenant 28 days, from the day after the notice has been received by the tenant, to pay back any rent owed. This communication must be in written form. An email, phone call or text will not suffice. The written notice must include the full amount of rent arrears owed, the time the tenant has to make payment and an explanation that failure to pay this amount on time will lead to a “Notice of Termination” being served.

Sample templates for such notices can be found on the rtb.ie website.

Step 2

The landlord must also provide a copy of the written notice of the rent arrears to the Residential Tenancies Board (RTB). This should be the same letter that the landlord has sent to their tenant. It is best to send both letters at the same time, as the 28 day notice period can only begin when both the tenant and RTB have received a copy of the landlord’s written warning notice.

Step 3

Upon receipt of the written warning notice from the landlord, the RTB will write to both the tenant and landlord confirming that they have received a copy of the notice and will provide both the tenant and landlord with information about the rights of both parties under the Planning, Development, and Residential Tenancies Act 2020 (PDRTA). They will also advise the tenant on income support structures available to them, should they need assistance to pay the rent arrears.

Step 4

If applicable, the tenant can complete and submit a Self- Declaration Form to the RTB, along with any other required documents to verify their financial situation. They must also send a signed and dated photocopy of the form to their landlord. This applies in cases where the tenant may be in receipt of illness benefit or may be out of work on Covid leave. They should include documentation as evidence if they are receiving any type of temporary wage subsidy or social welfare payment as a result of loss of earnings due to Covid-19. A self- Declaration form can be found on the RTB website.

Step 5

At this time, the tenant should also serve notice on the RTB to request assistance for advice from the Money Advice and Budgeting Service (MABS). Within 5 days of making a self- declaration, the tenant must also serve a written notice to their landlord seeking a consultation to make an arrangement to pay any rent due.

Step 6

When the RTB receives the self- declaration form from the tenant and their intention to seek advice from MABS, the RTB help the tenant to receive the relevant advice they may need.

Step 7

These new PDRTA protections for tenants in rent arrears do not apply when;

• The rent arrears amount to 5 months’ rent or more.
• When a tenant fails to submit a self- declaration form or fails to notify the RTB of their wish to seek MABS advice.
• When a tenant fails to comply with or engage in an agreement for payment with the landlord.
• If the application of the PDRTA tenant protections would cause undue financial strain for a landlord.

In these instances, a landlord can serve a written self-declaration form to the RTB along with a signed and dated photocopy of the form to the tenant. The landlord should also send the RTB any supporting documents for their case e.g. Evidence that the tenant has not complied with a payment agreement, engaged with the RTB or MABS or evidence that the loss of rental income is causing financial hardship to the landlord.

Upon receipt of the a self-declaration form from a landlord, the RTB will issue a letter of confirmation of receipt to both the landlord and tenant.

Step 8

If the reason for rent arrears is not a cause of Covid-19 and the landlord has not received a self- declaration form from their tenant, then a landlord can serve the tenant with a written Notice of Termination. This gives the tenant a 28-day period to pay the rent due.

If a landlord has received a self- declaration form from their tenant, then the tenancy cannot be ended before January 13^th 2022 and the tenant must be given 90 days’ notice of termination of tenancy for this date. No rent increases are allowed before this date.

Step 9

A landlord must send a copy of the Notice of Termination to the RTB and tenant or the Notice of Termination will be invalid.

Step 10

If the RTB receive a Notice of Termination for rent arrears from the landlord, the RTB will notify the tenant in writing of their right to refer a tenancy termination dispute to the RTB within 28 days of receipt of the notice.

When dealing with a tenant who is in rent arrears it is a good idea for both the landlord and tenant to keep copies of all correspondence received and sent. These will provide evidence of measures taken so far, should any complications arise during the process. Copies of all forms needed, along with templates and examples, can be found on the RTB website.