30 July 2019

How a mortgagee repossession would affect your tenants

If you have failed to keep up with the mortgage payments for your rental property, the mortgagee (the bank, credit union etc.) may apply to the Supreme Court for possession. As part of this process the mortgagee may give the tenant notice of the application to repossess the property via Form 17, which could result in a concerned tenant contacting you for more information.

The process from application to court-ordered possession can be lengthy so the tenancy agreement continues as usual and the property is still in your name. Once the mortgagee takes possession of the property, they may choose to terminate the existing residential tenancy agreement. Again, the tenant may contact you for more information.

If this happens, there are several important things you should know:

• The mortgagee must give the tenant at least 30 days’ notice to vacate using Form 14.
• The tenant does not pay rent during the 30 day notice period.
• The tenant is entitled to be repaid any rent that was paid in advance for that 30 day period and must contact the mortgagee’s representative listed on the Form 14 to make arrangements for any refund. 
• The mortgagee can enter the premises during the 30 day period to show it to prospective buyers provided the tenant receives reasonable notice and agrees to the date/time. 

For detailed information, visit our new Mortgagee ending a tenancy page that explains the process, timings and options available to tenants.

New! Information and resources regarding illegal drug activity in homes

Illegal drug activity in residential properties is cause for concern for tenants, owners, property managers and real estate agents alike due to potential health and safety risks to occupants. Illegal drug activity in homes, including clandestine laboratories (clan labs), cannabis grow houses, and smoke houses, can contribute to damage or contamination from drug or chemical residues. 

Landlords have a responsibility to ensure their property is safe and clean for occupants. As a general practice you should be alert to any illegal drug activities that may affect a property you own. The routine inspection or engagement process with tenants is a great way to check for signs of questionable activity.

If you believe or suspect that there has been a clan lab or smoke house at your property, you are required to undertake the necessary cleaning before leasing. Should tenants become ill from the effects of a clan lab, they may lodge a claim for compensatory damages.

You may choose to adopt a precautionary cleaning regime for all new tenancies as a routine measure. 

The Department of Health guide, Illegal Drug Activity in Homes: Managing Risk  A Guide for Occupants, Landlords, Property Managers and Agents, helps you identify and manage illegal drug contamination in residential properties in order to reduce the risk of exposure to occupants and protect your interests. It’s a great addition to your resource kit!