COVID-19 and section 14 (rent default) notices - Real estate industry bulletin 226

13 July 2020

It’s important to know the difference between a section 14 (rent default) notice and a section 19 (remedial) notice. A section 14 (rent default) notice is issued when a tenant is not paying rent because they’re affected by the COVID-19 coronavirus pandemic. A tenant who’s not financially affected by COVID-19, and not paying rent, would instead be issued with a section 19 (remedial) notice. This eBulletin will focus on section 14 (rent default) notices and how they work.

The Residential Tenancies (COVID-19 Response) Act 2020 (the Act) has been created to ease the hardship tenants and landlords are experiencing due to COVID-19.

The Act includes a moratorium on evictions during the emergency period, from 30 March 2020 to 29 September 2020, to stop people moving from place to place and reduce homelessness. It is not a moratorium on paying rent and where tenants can afford to pay, they should continue to do so.

The Act provides different notices and processes for non-payment of rent, depending on the tenant’s circumstances. It’s important to choose the process that correctly applies to your renter’s situation.

There are two different scenarios which apply where a tenant is not paying rent during the emergency period:

1. The tenant is COVID-19 affected and unable to pay some, or all of their rent, or
2. The tenant is not COVID-19 affected and refusing to pay their rent.

Section 14 (rent default) notice process

If a tenant defaults on paying some, or all, of the rent during the emergency period and is experiencing financial hardship due to COVID-19, the landlord  may issue a section 14 (rent default) notice to terminate the tenancy. The termination date must be after the emergency period.

For the rent default notice to be served the landlord needs to have entered into a rent repayment agreement with the tenant, or have attempted to reach agreement though the department’s Residential Tenancies Mandatory Conciliation Service.

The date the rent default notice is issued will depend on whether there is a rent repayment agreement in place at the time of default, and the conduct of the parties. There is no new form for the rent default notice. The document you need to use is the Residential Tenancies Act 1987 Form 1A or 1B, depending on the circumstances.

A rent default notice cannot be issued if the landlord or representative have not cooperated with the mandatory conciliation process. If the tenant has not cooperated during conciliation then a landlord or representative can issue the rent default notice immediately, and the termination date can be straight after the end of the emergency period. Please refer to this breach process flowchart for more details.

Please see the department's Residential tenancies - COVID-19 response page for more information about renting rights and responsibilities during the COVID-19 emergency period.