Rent from residential properties is a common sources of income for investors. Investment properties can, however, be a giant headache for landlords (also known as lessors) when terminating a residential lease and re-possessing the property because of an un-cooperative tenant. Tenants may breach their lease agreements in a range of ways, including by failing to pay rent. This article will explore the steps needed to terminate a residential lease and re-possess a leased property in Western Australia.
The governing law in WA for residential tenancies is the Residential Tenancies Act 1987. However, the Act does not cover all aspects of the law when it comes to residential tenancies, hence it is recommended that Landlords obtain independent legal advice. Residential tenancies are overseen by the Consumer Protection division of the Department of Mines, Industry Regulation and Safety
When can landlords terminate a residential lease?
Before terminating a residential lease, a landlord must establish that they have legal grounds to do so and follow the requisite procedures. The right to terminate is often derived under a residential lease agreement as a remedy in the event the tenant breaches one of the essential terms of the lease.
Failure to pay rent
One of the most common situations where terminating a residential lease is necessary is where the tenant fails to comply with their obligation to pay rent. Once a tenant has failed to pay rent, the landlord can issue and serve on the tenant a Breach Notice demanding that the breach be rectified and the tenant has a limited window of time to do so (usually 7 – 14 days). If the tenant fails to rectify the breach then the landlord can issue and serve on the tenant a Termination Notice. When the time period of the Termination Notice lapses, the Landlord then has the right to re-possess their property.
All of the commonly used forms and notices are on the Department of Mines, Industry Regulation and Safety’s website.
Fixed term leases
Another common situation where terminating a residential lease may be necessary is at the end of a fixed term tenancy lease or during a periodic lease. To terminate a fixed term tenancy, the landlord must issue and serve on the tenant within 30 days of the lease expiring a Notice of Termination of their intention to end the lease. Failure to do this will result in the lease automatically being converted to a periodic tenancy at the end of the fixed term.
A periodic lease is one whereby either the Landlord or the tenant can terminate the lease by giving the requisite notice. For Landlords, the notice period is 60 days. However, Landlords do not have to a give a reason nor has to be a breach of any sort for a periodic lease to be ended.
What happens after terminating a residential lease?
Unfortunately, sometimes landlords have difficulty with tenants even after terminating a residential lease. Tenants may refuse to vacate a property even where the lease has been validly terminated. If this occurs, the landlord will need to make an application for an order to have the property re-possessed.
If the breach in question relates to the tenant failing to pay rent, where the arrears or damages sought is less than $10,000.00 or if it is in relation to a non-rent breach, then the landlord makes their application in their local Magistrates Court under the residential tenancy division.
However, if the breach in question relates to a tenant failing to pay rent where the arrears or damages sought is more than $10,000.00, then the application needs to be made in the General division of the Magistrates Court. This is because the jurisdictional limit of the residential tenancy division is $10,000.00.
Whether the application is in the residential tenancy division or the general division will also affect whether parties will be permitted to have legal representation and whether legal costs can be claimed.
Property Seizure and Delivery Order
Lastly, there are occasions when tenants still refuse to vacate the property even after the landlord obtains an order from the court. If this occurs, the landlord will need to apply for a Property Seizure and Delivery Order (PSDO) and organise a bailiff and locksmith to facilitate the PSDO. It is recommended that independent legal advice is obtained to ensure that all of the necessary personnel are appointed, and steps taken.
What if the tenant still owes me rent or I have to fix damages they have caused?
If the amount sought is under $10,000, this can be included as part of the residential tenancy application itself. However, if the amount sought is over $10,000, landlords will need to file a separate application for damages in the general division.
GTC Lawyers has a team of highly trained expert lawyers who are more than capable of advising and representing their clients when it comes to residential tenancy matters.
If you require advice on terminating a residential lease, or in any other legal matter, please book a consultation with Go To Court Lawyers.
By Jemin Jo, Associate