14th August, 2026
Rent arrears occur when a tenant falls behind on their agreed rental payments. In New South Wales (NSW), tenants must pay rent according to their tenancy agreement. Therefore, missing payments can breach the agreement and create legal consequences.
For landlords, unpaid rent can quickly affect cash flow and property expenses. However, landlords must follow the correct legal process when addressing arrears. They cannot simply remove a tenant or change the locks.
What happens when rent goes unpaid?
When a tenant misses a payment, the landlord or agent may contact them about the outstanding amount. In some situations, discussing the issue early can prevent further problems.
Additionally, tenants experiencing financial hardship may negotiate a repayment plan with their landlord. Any agreed repayment plan should clearly outline how the arrears will be paid.
However, ongoing arrears can lead to more serious action. Under NSW law, rent must remain unpaid for at least 14 days before a non-payment termination notice can be issued.
Can a landlord terminate the tenancy?
Once the relevant arrears period has passed, a landlord or agent can issue a termination notice. The notice must meet specific legal requirements and provide the required notice period.
For non-payment of rent, the termination notice generally provides 14 days for the tenant to vacate. Importantly, the notice must identify the property and reason for termination. It must also include other required information.
Nevertheless, receiving a notice does not always mean the tenancy will immediately end.
If the tenant pays the outstanding rent, the tenancy may continue. Similarly, the tenant may remain if they follow an agreed repayment plan. There is an exception where the tenant frequently pays rent late.
What if the tenant refuses to leave?
If the tenant does not leave by the termination date, the landlord cannot simply evict them. Instead, the landlord may apply to the NSW Civil and Administrative Tribunal (NCAT).
NCAT can consider the circumstances and determine whether the tenancy should end. Therefore, landlords should keep records of payments, arrears, notices and communications.
Furthermore, landlords should ensure their notices comply with NSW requirements. Mistakes in the process can create unnecessary delays and disputes.
How can legal advice help?
Rent arrears can become complicated when tenancy issues overlap with property transactions. For example, a landlord may want to sell an investment property while dealing with outstanding rent.
Consequently, obtaining appropriate legal advice can help landlords understand their options. It can also help ensure property transactions and tenancy matters are handled correctly.
How We Can Help
Rent arrears can create significant challenges for both landlords and tenants. However, understanding NSW tenancy requirements can help parties respond appropriately.
The team at Castrikum Adams Legal can assist with property-related legal matters, including conveyancing and other property issues. We proudly service Byron Bay and surrounding areas, including Ballina, Lennox Head, Bangalow, Mullumbimby, Brunswick Heads, Ocean Shores, Suffolk Park, Alstonville and Lismore.
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The content of this Blog does not constitute legal advice, is not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any specific matters you or your organisation may have.