Tenant Can't Pay Rent - What Do I Do?

Surely it's been a tough year for each and everyone of us. Business has been really bad, everything got stuck, where do money even come from?! As landlords, for sure they are hoping for passive income to pay off their loans. However, some tenants who were working their ass off has just been cut off their income stream. So, what could you do as a landlord?

by Javen Loh, Marketing Manager of White Forest Suites, 31/10/20

For tenants, it seems like there's not much to be done except for searching ways to earn more and praying for Covid-19 to go away! For landlords who are facing situation where tenants refuses to or are unable to pay off their rent, there are few approaches to be considered.

First of all, you may want to Talk To Your Tenant. Listen out for the reasons behind. As we all know that this is a critical time for everyone, and for those who are entitled to get moratorium, why not consider renegotiate the terms and lend a hand to those in need?

Perhaps one could consider a revised payment structure, rental rebate or even waiver depending on situations. Chasing the tenant out won't do any good for landlords as it will take time and a lot of effort to get a new tenant especially in times like this. Even if one is lucky enough to find a tenant, the rental most probably wouldn't reach the expected rate. And for those who engaged an agent would need to pay commission, too!

Otherwise, the last resort would be to Take Legal Actions. Generally, landlord would be advised to refer to the Tenancy Agreement before taking the next steps. When it's obvious that tenant can't even pay for their monthly rental, don't you even think about asking for monetary losses - reclaiming property itself is already such an unsettling process.

The normal process would involve issuance of notice to terminate the contract and to repossess your property. Then, proceed to file a lawsuit and apply for distress action. Only in the presence of a police officer, then you may break into your own property and recover the premise.

Note: NO ONE is allowed to

- change the locks,

- cut of the utility including water & electricity, OR

- remove any items belonging to the tenant.

All these would be considered ILLEGAL. In the event that tenant loses any of his/her valuable, there could be a cause of action on alleged theft + trespassing! Although it's suggested by a recently decided case that landlords are allowed to cut of utilities IF it's stated in the tenancy agreement, it's advisable to inform the tenant first before doing so. This is to avoid situations where such action causes death or injury to persons (the sick or elderly) within the premise.

The bottomline is, always seek advice from the professional and carefully draft your agreement to include all necessary terms and conditions, as well as alternatives in the event of breach of contract by either party.