What to Do When a Tenant Stops Paying Rent

For many landlords, rent arrears are one of the most stressful aspects of managing a rental. No one likes chasing missed payments, and when arrears happen, it can quickly disrupt cash flow, strain relationships, and trigger legal processes. While many landlords hope it won’t happen to them, it’s one of the most common problems in residential property management.

In fact, according to the latest Tenancy Services data, rent arrears were the number one reason landlords applied to the Tenancy Tribunal between 1 January and 31 March 2025, making up 74.16% of applications. It’s a clear sign that rent arrears remain an ongoing concern for property owners across New Zealand.

In this blogpost, we’ll break down what landlords should know about rent arrears in New Zealand, especially in today’s environment.

What Are Rent Arrears?

Put simply, rent arrears occur when a tenant has not paid their rent by the agreed due date specified in their tenancy agreement. Even one missed day technically counts as rent arrears under the Residential Tenancies Act 1986.

While missed payments sometimes happen due to unforeseen circumstances, addressing them quickly and fairly can prevent a minor issue from turning into a serious problem.

Why Do Rent Arrears Happen?

Common reasons include:

• Unexpected financial difficulty (job loss, illness, family emergency)

• Poor money management or other debts taking priority

• Oversights or misunderstandings about payment dates

• Lack of clear payment systems or follow-up processes

  
  

Most tenants do not intentionally withhold rent, but life events can affect their ability to pay on time. Prompt and open communication is key in these situations.

The Risks for Landlords

Leaving rent arrears unresolved can lead to:

• Ongoing loss of rental income

• Mortgage repayment issues if rent was relied upon

• Disputes that damage landlord-tenant relationships

• Potential Tenancy Tribunal hearings

• Costs associated with debt collection and legal processes

  
  

Given how common this issue is, having a reliable and well-structured approach to rent arrears is a valuable safeguard for any landlord.

What the Law Says

Under the Residential Tenancies Act:

• A 14-day notice to remedy can be issued once a tenant is even one day behind

• If rent is 21 days or more overdue, landlords can apply directly to the Tenancy Tribunal for termination

• Proper record-keeping and prompt action are essential, as delays can weaken a landlord’s position if a dispute escalates

  
  

Proactive Ways to Minimise Rent Arrears

Whether you self-manage or work with a property manager, these steps can help reduce the risk:

• Thorough tenant vetting: Check rental history, references, and financial reliability before approving an application.

• Clear rent payment expectations: Ensure tenants understand when and how rent should be paid, and include this in writing within the tenancy agreement.

• Regular rent monitoring: Keep track of incoming rent so any issues are picked up early. If you’re self-managing, it can be helpful to set up a dedicated bank account for rent income. This makes it easier to spot missed payments and manage rental-related expenses separately from your personal finances.

• Prompt follow-up on missed payments: If a payment is missed, get in touch straight away to discuss the situation. It’s not always easy having these conversations, but approaching them early and professionally makes a big difference.

• Good record-keeping: Maintain a clear log of payments, notices, and communications.

If you have a property manager, these processes should already be part of your service. It’s worth checking how arrears are monitored and followed up so you know you’re supported when those situations arise.

Final Thoughts

While rent arrears are unfortunately a common part of owning a rental, having a clear process in place makes a significant difference. The latest figures from Tenancy Services confirm that this remains the top tenancy concern for landlords in New Zealand. By staying informed, maintaining strong communication with your tenants, and addressing issues early, you can manage rent arrears fairly and efficiently.