What Actually Happens When a Tenant Stops Paying Rent (And How to Protect Yourself From Day 1)
- Patrick Rankin
- Dec 11, 2025
- 4 min read
When a tenant stops paying rent, most landlords do one of three things:
They panic.
They freeze.
Or they start Googling the Residential Tenancies Act at 2am like they’re studying for an exam they never signed up for.
The truth?
Waiting — even a few days — is where small arrears turn into big losses.
And with insurance requirements tightening, documentation rules getting stricter, and Tribunal wait-times increasing… doing nothing is the most expensive option.
So let me show you exactly what happens the moment rent stops — and the process we follow at Good Neighbours to protect landlords properly.
The 1 Reason Landlords Lose Money: They Wait Too Long
Here’s the mistake we see every week:
“I thought I had to wait 14 days!”
Nope.
This is the myth that sinks landlords financially.
You do not need to wait 14 days to take action.
You do not need to wait 21 days to file with the Tribunal.
And you should never wait for arrears to “sort themselves out.”
Speed + documentation is what protects you — and your insurance — every single time.
(Our Rent Arrears Survival Guide breaks down the entire timeline in detail. )
Step-by-Step: What Happens When Rent Stops Being Paid
Step 1: Day 0 – Rent Missed (Don’t Panic… But Don’t Wait)
Rent doesn’t arrive at midnight?
Not a crisis — yet.
But this is where most arrears blow out because landlords wait five, seven, even ten days before doing anything.
We check arrears daily.
And we send a gentle message:
“Hey, just a heads-up — looks like rent didn’t come through today. Everything alright?”
Most arrears begin with something simple — a missed automatic payment or a banking glitch.
But the documentation begins right here.
Step 2: Days 1–3 — Support Mode, Not Stress Mode
If rent still hasn’t arrived, we shift into calm, supportive, professional follow-up.
“We just want to help you get ahead of this before it becomes stressful.”
The goal here is twofold:
Keep communication open.
Prove (for the Tribunal and insurers) that you took reasonable, early steps.
No aggression. No threats.
Just professional management.
Step 3: Days 4–6 — The 14-Day Notice (Where Most People Get It Wrong)
This is the critical point.
If arrears remain unpaid by Day 3:
We issue the 14-day notice AND begin preparing the Tribunal application.
Most landlords don’t realise:
You don’t need to wait 14 days before applying to Tribunal.
You can file immediately after serving the notice.
Filing early locks in your queue position.
This alone can save landlords thousands and weeks of stress.
(Yes — this is confirmed in the legislation and explained clearly in your Survival Guide. )
Early action isn’t personal — it’s professional.
Step 4: Day 7 — Tribunal Application (Best Practice)
This is where Good Neighbours moves faster than almost all self-managing landlords:
We apply to the Tribunal on Day 7.
Why?
Because:
Arrears grow during wait times.
Fast-track termination at 21 days only works if earlier steps were done correctly.
Insurance policies expect early action and documentation.
Waiting until Day 21 means you’re just beginning the Tribunal process, not ending it.
This is the part almost every private landlord gets wrong — and it’s the difference between losing $500… and losing $5,000.
Step 5: Documentation — The Secret Weapon That Wins Cases
We track:
Daily arrears
Communication logs
Proof of service
Behaviour patterns
Part payments
Ledger entries
Notices issued
Tribunal orders and insurance claims depend on this paperwork.
A missed entry, missing proof, or informal communication?
That’s how claims get declined — especially loss of rent claims.
Documentation is everything.
Step 6: Day 21 — Fast-Track Termination (Only Works If You Did Steps 1–5)
Once arrears hit 21 days, Tribunal (not the landlord) can issue fast-track termination.
Many private landlords try to end a tenancy themselves at 22+ days.
This is unlawful — and can cost them the entire case.
The key?
Your Day 7 application means you’re already lined up for mediation or hearing right when you hit this threshold.
That speed protects you.
Step 7: The Professional Tenant (The Biggest Hidden Risk)
You know the type.
They know the Act better than most landlords.
They target private owners who:
Don’t document properly
Don’t serve notices correctly
Don’t apply early
Don’t know the legal process
When a landlord says “I’ve been lucky for years,” it usually means one thing:
They haven’t met a professional tenant yet.
Step 8: After Possession — The Real Work Begins
Once the tenant has vacated — whether through Tribunal termination, fast-track, or correct notice — the recovery phase starts.
We immediately complete:
Exit inspection
Damage vs wear and tear assessment
Cleaning & rubbish removal
Lock changes
Bond refund process
Insurance claims
Debt recovery steps
Tribunal enforcement if required
When this stage is handled fast, landlords save thousands.
Debt Collection: Where Most Landlords Give Up (We Don’t)
Most landlords write off unpaid rent.
We don’t.
We pursue debt using:
Tribunal orders
Debt collection agencies
Wage deductions
Credit reporting
Binding repayment arrangements
Court enforcement when applicable
Because we followed the process correctly from Day 1, we have the evidence needed to recover arrears.
Often, this alone pays for our service.
The Bottom Line
When rent stops, the worst thing you can do is wait.
The Good Neighbours system manages arrears from Day 1–30 and beyond — including Tribunal and debt recovery — with precision, speed, and full insurance compliance.
It’s the difference between a manageable issue… and an avoidable financial disaster.
Download the Free Rent Arrears Survival Guide
Want the full step-by-step timeline, templates, and legal breakdown?
Download the Rent Arrears Survival Guide for Landlords
Your free toolkit that shows exactly what to do from Day 0 to fast-track termination — and how to stay fully compliant with NZ law and your insurance.
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