How to deal with a tenant not paying rent

If you’re a landlord, reliable rental income is part of keeping your investment on track. But what happens when a tenant isn’t paying the rent? It’s important to understand your rights and what steps to take next.

Here’s what you should know, including the specifics of what landlord insurance covers.

What to do if a tenant has missed a rental payment

If your property is managed by a rental agency, it’s their responsibility to chase up on rent. So, in situations like these, it’s best to contact your property manager. However, if you’re managing the property yourself, here are the steps you can take:

• Start by confirming whether it’s an oversight or a more serious issue. Sometimes, a simple reminder can resolve things instantly.
• If the rent remains unpaid, check your tenancy agreement for grace periods and payment terms.
• Contact the tenant in writing and keep records of all communication.
• Issue a formal breach notice if required under your state or territory.
• If the rent remains unpaid, follow the legal process set by your local tribunal.

Every state in Australia has its own rules around landlord rights for missed rent payments. Always remember to follow the correct legal processes before taking further action.

Loss of rent vs rent default: What’s the difference?

Rent default generally refers to a tenant failing to pay rent they owe under the lease agreement. This often leads to arrears and may result in eviction if unresolved.

Loss of rent, on the other hand, typically relates to rental income you lose because your property can’t be tenanted due to an insured event (such as a storm or fire damage), or sometimes after a tenant default where the property becomes not fit to live in.

Both can affect your cash flow, but they’re treated differently in your insurance policy.

Am I covered if my tenant defaults on their rent payments?

GIO Landlord Insurance may cover you for financial loss linked to rental issues. But your level of coverage depends on your policy. As always, limits and exclusions apply, so it’s important to review your Product Disclosure Statement (PDS).

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What landlord insurance covers

A comprehensive landlord policy is designed to protect your investment property from a range of risks, not just missed rent.

GIO Landlord Insurance includes cover for:

• Damage to the building or contents caused by insured events (like storms, fire or theft).
• Loss of rental income following an insured event.
• Legal Liability claims if someone is injured at your rental property.
• Rent default and tenant-related losses such as malicious damage or vandalism.

GIO Landlord Insurance is designed to support landlords, protecting both the building and your rental income stream.

Can you evict a tenant for not paying rent?

Yes, evicting a tenant for not paying rent is generally possible under Australian tenancy laws. However, eviction must follow a strict legal process. In most cases, you’ll need to:

• Issue a notice to remedy the breach (unpaid rent).
• Allow the required notice period to pass.
• Apply to your state or territory tribunal if rent remains unpaid.
• Obtain an official termination or possession order before eviction.

Don’t attempt to remove a tenant without going through the proper channels or you may face legal complications. Always follow your local legislation to ensure you’re acting within the law.

Explore GIO Landlord Insurance

Read more:

• What’s the difference between landlord insurance and home insurance?
• How to self‑manage your rental property
• A guide to leaving a rental property

Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Read the Product Disclosure Statement before buying this insurance. The Target Market Determination is also available. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it..

The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.