One agency has found that a zero-tolerance arrears policy isn’t the most effective way to manage tenants and ensure rents are paid.
Tina Case, principal of Professionals Lithgow, said her agency’s arrears are usually between 0.8 and 2.2 per cent, because she feels understanding and compassion help deliver better results.
“It comes down to knowing your tenants and knowing why they’re in arrears, and dealing with them as individuals rather than lumping them together as a collective,” she told RPM.
“Thinking about it from a customer perspective, I was really concerned that the only communication tenants seemed to have from my office was negative, so I didn’t want that to be a continuing thing.”
Ms Case said her agency has standard text messages that are sent once a tenant is in their third day of arrears, to allow a grace period for BPAY and payment processing.
“We look at the arrears list every day before sending the messages because there might be people who have called me,” she said.
“We try to swap the messages around a little bit because people who are traditionally serial offenders get used to the texts and think it’s just the same old thing.”
According to Ms Case, it also helps to email and call tenants who are either new to the arrears list or serial offenders, to ensure they are receiving the text messages and that arrears won’t be an ongoing issue.
“You’ve only got to look at the patterns to see when somebody is going to be paying again, so if someone’s a couple of days late but they pay on exactly the same day every single time, then we won’t harass about that because, again, it’s only giving negative talk out to my clients,” she said.
“What we’re trying to do is be a bit compassionate; sure, it takes more time, since we’re not just sending out automated messages, but it also means I know exactly who’s on my arrears list and I know exactly what’s going on with them,” she said.
Ms Case said landlords are contacted after a tenant is seven days in arrears, while tenants who ignore the daily text messages and regular phone calls are sent a termination notice after 14 days in arrears.
“We need to put ourselves in the tenant’s shoes; how annoyed would you be as a tenant if you rang the real estate agency and they still send another arrears message? I just feel that creates animosity that doesn’t need to be there.”
[Related: How tough is your arrears policy?]