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Rent arrears incompetency stems from sign-up

31 October 2014 Elyse Perrau

Failing to lay down firm 'ground rules' at the time a tenant signs up, and getting too personally involved, leads to a build-up of rent arrears that can be hard to shake, say property management directors.

Failing to lay down firm 'ground rules' at the time a tenant signs up, and getting too personally involved, leads to a build-up of rent arrears that can be hard to shake, say property management directors.

Pure Leasing director Cameron Ewers said he believes the most important part of rent control is laying down the ground rules at the time of sign-up. This way, the tenant can never plead ignorance.

“If a tenant contacts us proactively to advise us of an issue that may delay their rent payment, we will always work with them to try and find a positive outcome while keeping the owner informed,” he told Residential Property Manager.

“The tenants that I have absolutely no time for are the people who make no effort to contact us, do not return calls/SMS/emails.

“In this instance, we issue a seven-day termination notice for non-payment of rent, which in most cases gets a pretty swift response,” he added.

Also speaking to Residential Property Manager, M Residential head of property management and director Laura Levisohn said they also have a no-tolerance policy in place for rent arrears and this process is explained to their tenants at their 'sign-up/induction'.

“If rent is due today and unpaid they will receive a text advising rent due today,” she said.

“If it's still not received the following day, they receive another text advising rent is overdue.

“If on the following day they are still in arrears they will be issued with a Form 1B Notice of Termination for non-payment of rent, which allows them seven days to pay or vacate - they also receive a text advising of this action.

“Some may think this sounds harsh, but this is fully explained prior to signing their lease so they are fully aware of their obligations and our process,” she added.

Mr Ewers said he receives a multitude of excuses from tenants who have overdue rent, detailing some below:

  • "I’ve paid it, I think you need to check with your bank"
  • "I’ve got two kids you know…" 
  • "I had to pay my mobile bill"
  • "I’ve been on holidays"

“My response is usually along the lines of, 'If your lights are still on, and your rent isn’t paid, you need to review your priorities',” he said.

Ms Levisohn said due to the processes they have in place they don’t hear too many excuses. However, a common excuse is that the tenant’s salary is paid out of line with their rent due date.

“In this case we work with the tenant and calculate the individual days of rent to move them to fall in line with their pay date, and bingo! They are back on track,” she said.

Mr Ewers said one of his top tips to other property managers for dealing with rent arrears is to religiously follow up all rent arrears daily and diligently.

“If you only go on a ‘rent arrears blitz’ every so often, it loses credibility,” he said.

“[Secondly], be firm but fair, and encourage communication because sometimes people do genuinely need some help – most people will respect genuine efforts to assist, which will encourage them to do the right thing.

“If any particular person in the office is not having any luck with a tenant, try someone else in the office – sometimes a different voice can have a greater impact.

“[Finally] keep rent arrears calls strictly business only; don’t enter into personal discussion with them at all,” he added.

Rent arrears incompetency stems from sign-up
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