How Tough is Your Arrears Process?
Arrears is often an area that can raise those stress levels and as the rental market becomes tighter in finding tenants and those vacancies rise, you can sometimes find that as a Property Manager, you are reluctant to issue a termination notice to a tenant or you may even find the Owner objecting to evicting a Tenant albeit a bad one for fear the property may be vacant for a lengthy period of time.
While it is tempting to stick with the devil that 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. The frequency of how often and when you produce this list will depend on payment frequencies of your tenants, the type of payment system you have and how challenging your market may be in relation to late payers.
- Adopt a zero tolerance policy. You can guarantee that when it comes to late payments, while there are those that will be genuine; you will hear every excuse imaginable. These become extra colourful sometimes 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 to inform them 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.
- Calling or even sending an sms to a late payer is more likely to receive a response rather than a letter and even talk with your Tenants about payment plans where 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 Owners who are determined not to allow you to issue those notices, then follow it up in an email, just to cover your office.
Having strict arrears processes in place will assist in saving you time and reducing your stress levels in the long run.