Property Management Tip - Rent Collection and Arrears Management

 

There are several important points with rent collection to help landlords to minimise the likelihood of arrears occurring, and the amount of arrears potentially incurred.

• Always check that rental payments have been made on the due date so you can initiate collection of arrears immediately
• Automatic rent payments deposited directly into your rent account are preferable, and it is best to set up payments to coincide with the date of your tenants personal income payments to reduce the likelihood of missed payments
• Have a zero tolerance policy to arrears and have direct and immediate contact with your tenant in the event of rent payments being missed
• Arrange immediate repayment of arrears (preferably the next day) with your tenant and if repayment is not initiated as agreed start formal proceedings (e.g. issue of 10 day notice) straight away - this way if rent remains unpaid the tenancy bond is likely to cover the arrears incurred if you have to progress to eviction
• Formalise agreements relating to repayment of arrears via a Tenancy Tribunal Mediation or Hearing and enforce Tribunal Orders when necessary to recover arrears
• Lodge Tribunal decisions and 10 day notices with tenant databases such as Tenancy Information NZ ( TINZ ) to help protect other landlords from suffering the same problem from repeat offenders

By following the points above, you will collect rents on time more often. Rent collection is imperative to the success of a rental property. Learn from your mistakes and improve your rent collection policies as you go. By having a solid foundation to start with you will be better prepared if the time comes when a tenant stops paying.
While the information above is general knowledge, it is targeted at the New Zealand property management industry whether privately or professionally managed.

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