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How tough is your arrears process?

06 May 2016 | 10 minute read
Heidi Walkinshaw 2016 cropped

Arrears is often an area that can raise stress levels, as the rental market becomes tighter in terms of finding tenants and vacancies rise.

You can sometimes find that, as a property manager, you are reluctant to issue a termination notice to a tenant. You may even find the owner objecting to evicting a tenant, albeit a bad one, for fear that the property may be vacant for a lengthy period of time.

While it is tempting to stick with the devil you know, it is important to ensure that you maintain a strict arrears process to cover yourself should something go awry, and maintain regular owner contact throughout.


Let’s take a look at some tips to ensure your process is on track:

  • Prepare an arrears list. How often you produce this list will depend on the payment frequencies of your tenants, the type of payment system you have and how challenging your market is in relation to late payers.
  • Adopt a zero-tolerance policy. It is guaranteed that when it comes to late payments, while there are those that will be genuine, you will hear every excuse imaginable. These sometimes become extra-colourful with your habitual late payers. Explain your arrears policy at the lease signing to begin on the right foot.
  • Don’t forget to communicate throughout the arrears process. Keep in contact with your owners to advise them when the tenant falls into arrears and ensure that they don’t receive a nasty surprise on their monthly statement. It’s also great to give them a call when the rent has been paid up to date.
  • A phone call or even an SMS to a late payer is more likely to receive a response than a letter. You can even talk with your tenants about payment plans if they are really struggling.
  • Always record notes – even phone conversations – in your software, which can then be printed out should you need to go down the tribunal path. Following up the conversation with an email can assist your records.
  • Check your state’s legislative requirements and issue notices on the dates required. If you have an owner who is determined not to allow you to issue these notices, then follow it up in an email, just to cover your office.

Having strict arrears processes in place will save you time and reduce your stress levels in the long run.

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