If you cannot keep up your rent payments you are considered to be in ‘rent arrears’. If you find yourself in this situation you should inform your landlord or real estate agent about your difficulty and try to negotiate a repayment plan.
When you are in rent arrears you have a number of options available to help you stay on in your rented home, however you need to act quickly and keep in regular contact with your landlord or real estate agent.
- How to negotiate a repayment arrangement with your landlord
- If you receive Centrelink payments
- Obtain a Centrelink advance payment
- Apply for a Bond Loan Scheme loan for a new rental contract
- Breaking Your Lease
- Further information
How to negotiate a repayment arrangement with your landlord
If you are experiencing difficulty paying your rent, make sure you contact your landlord or real estate agent as soon as possible, explaining your circumstances and ask for consideration.
Be careful not to offer to pay more than you can afford. Be sure to put the offer in writing and keep a copy for yourself. Even if your landlord or real estate agent rejects your offer, you can use the letter as evidence that you tried to resolve the matter.
If you receive Centrelink payments
Check that you’re receiving your full entitlement from Centrelink including rent assistance payments if you are renting in the private market (including more informal arrangements such as paying board). Rent assistance payments top up your income to help you pay rent above a set cost. They’re not intended to pay all of your rent, but to make rent more affordable for low-income earners in a competitive rental market.
Remember if you receive Centrelink payments you may be able to arrange to have your rent payments taken from your Centrelink payment through Centrepay (if your real estate agent is registered) before your fortnightly allowance is deposited into your account.
Obtain a Centrelink advance payment
Centrelink advance payments are interest-free loans available to recipients of Centrelink benefits once every 12 months.
You may be eligible for a Centrelink advance payment to cover your rent arrears. The advance can be up to $500 (up to $1000 for pensioners), which you repay by fixed deductions from your fortnightly Centrelink payment.
If you use a Centrelink advance payment to pay your overdue rent, you must then be able to afford current rent contributions and the fortnightly repayments of the advanced payment loan. This means operating on a reduced income in the future.
Apply for a Bond Loan Scheme loan for a new rental contract
Bond loans are interest-free loans from the Victorian Government to pay a rental bond or security deposit when you enter a new lease agreement. Bond loans are intended to ease the financial costs of entering a rent agreement when you have limited finances and low income.
Bond loans can only be used for to pay the bond on a rent agreement. They cannot be used for rent-in-advance or to cover moving costs.
To be eligible, your rent payments must be less than 55% of your income, and satisfy other criteria as part of your application. You will not be eligible for a bond loan if you have not repaid a previous bond loan.
At the end of the tenancy, you will be required to repay the full amount of the bond loan, even if your landlord withholds some of the bond because of unpaid rent or damage to the property.
Breaking Your Lease
If you have a fixed-term tenancy agreement (eg 6 or 12 month lease) and you want to move out of your rented home before the end of the fixed-term, you may be able to break your lease agreement in one of the following ways:
- mutual consent (both parties agree to end the lease agreement)
- hardship (eg you have lost your job)
- when the landlord is in breach (eg failure to keep property in good repair)
- assignment (assign your tenancy agreement to another tenant)
For tenancy advice and assistance, including tenants’ rights call the Tenants Union Advice Service/Tenants Union of Victoria (03 9416 2577), Monday, Tuesday, Thursday and Friday 9am – 4pm and Wednesday 4.30pm – 8pm.
For more information on tenancy matters such as eviction, repairs and excessive rent increases call Consumer Affairs Victoria (1300 558 181) Monday to Friday 9am – 5pm.