Serving a default notice. Tricky business?

//Serving a default notice. Tricky business?

Serving a default notice. Tricky business?

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Do you need to serve a default notice on a tenant? Find out how here.

How to serve a default notice

When a tenant is in breach of your lease, your lease should allow you to serve a default notice. See here for more information about what a breach is. See here for more information about what a default notice is.

But this is not as easy as it may seem. The law and your lease will require you to serve the notice in a certain way. How you do this will depend on what the lease says and what the law requires.

What happens when the tenant has changed their address for serving a default notice?

Most leases will allow for service in person, by post or by fax. But at what address or fax number? As a starting point, the lease should allow you to serve notices at the address or fax in the lease. And, if the tenant is a company, at its registered office or principal place of business. This is a no brainer. Right?

But what happens if the tenant’s address or fax changes? A tenant will often know they are going south long before you find out. In the meantime, they change address or their fax. They skip town. They do not update the ASIC register and you receive the notice as return to sender. In these cases, it then becomes hard to serve a notice.

How do you protect yourself when the tenant changes their address?

One of the best ways is to make sure that your lease allows service by email. I see so many leases that still do not allow for this. In fact, email today is far more reliable than fax. Most people these days do not even have a fax.

The best thing about email is that it is cheaper and instant. It saves the cost of paying a process server to serve in person. It avoids the delay by post. The post these days can take over 5 business days. If the tenant is in breach, you want to be able to terminate the lease ASAP. An extra 5 business days can have a big impact on the condition of the premises. And, therefore, the loss you suffer.

There are other tricks which lawyers often miss. The lease should require the tenant and guarantor to update their address, fax and email. It should also require them to maintain their email server. This may seem pointless because a tenant that is going south is not likely to do this anyway. This is correct! But what it can do is provide you with a defence if the dispute were to go to court.

The tenant or guarantor may say in court that you failed to serve the notice. You can then say the reason why you could not serve the notice was because they breached this clause. This could go a long way towards you being successful in court.

Consequences of not serving a default notice properly

These are similar to if you fail to prepare the notice properly. A court could find the service to be void. This may then lead to claims from the tenant for wrongful termination. Even for a small lease, the claim could be for tens of thousands of dollars. This is on top of legal costs.

It is important that you serve a notice properly. If you fail to do so, there could be dire consequences. Serving a notice, can be tricky business.

Can I help?

If you need to serve a notice and want to make sure it complies with the law, I can help. Please contact us here or below.

This article is not legal advice. You should get independent legal advice to deal with your situation.

For more articles, see here.

2021-03-21T12:13:55+08:00

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