A challenging rental market can generate extra stress when it comes to the arrears process.
You will sometimes find as a property manager that you are reluctant to issue a termination notice to a tenant. You may even find the owner objecting to evicting a tenant, even a bad one, for fear the property may be vacant for a lengthy period.
While it is tempting to stick with the devil that you know, it is important to ensure you maintain a strict arrears process to cover yourself should something go awry, maintaining regular owner contact throughout.
Let’s take a look at some tips to ensure your process is on track.
- Reporting – your software should allow you to bring up an arrears list either daily, weekly or fortnightly. The frequency of how often and when you produce this will depend on the payment frequencies of your tenants and how challenging your market may be in relation to late payers.
- Zero tolerance – you can guarantee that when it comes to late payments, while there are those with genuine problems, you will hear every excuse imaginable. These become extra colourful sometimes with habitual late payers. Hold fast to your zero-tolerance policy and don’t accept excuses, no matter how creative they may be.
- Communication is key – throughout the arrears process, make sure you are keeping in contact with your owners to advise them of progress. When the tenant falls into arrears, make sure you let them know so that they don’t get a nasty surprise with their monthly statement. It’s also great to give them a call when the rent has been paid up to date. You may even like to offer them a one-off payment, especially if they have been financially strapped.
- The importance of the induction – the lease-signing with a new tenant is the perfect opportunity to lay down the ground rules at the start of the tenancy. Let them know your arrears process and also request that they advise you if they feel they may be late for any reason, as we all know that sometimes life can get in the way.
- Pick up the phone – calling or even sending an SMS is more likely to receive a response than a letter. Even talk to your tenants about payment plans where they are really struggling.
- Document everything – even phone conversations. You can make notes in your software that can be printed out should you need to go down the tribunal path. Even following up the conversation with an email can assist your paper trail.
It is important to keep on top of those arrears, no matter how tough the market may be. Having strict processes in place will assist in saving you time and reducing your stress levels in the long run.