Non-Traditional Collection Techniques for LandlordsReal Estate Influence
June 24, 2013 — 1,424 views
Every landlord wants tenants to pay their rents in a timely manner without having to intervene themselves. But many tenants don’t always pay the rent on time, which sometimes leads to difficult situations. Conventional methods of paying rent include payment by cash or check that is directly paid to the landlord himself.
Rent collection from defaulted tenants can be made more hassle-free if the landlords adopt a good practice in managing rent collection.
Techniques Landlords Can Use to Collect Rent
Landlord collection of rent can be made easier by providing necessary information at the time of signing the lease agreement itself. As soon as the rent date is missed by the tenant, bring it to their notice through a letter. It is better to come into direct contact with the tenant for the purpose of collecting rent as this might be awkward for the tenant, and you can avoid chances of a confrontation.
Send a polite letter stating that the rent is due and that they can resolve the matter by giving you a phone call. In case the defaulted tenant responds saying that he/she can make only a partial payment due to financial conditions, it is advisable to accept a written agreement that the rest of the rent amount will be paid by the tenant in the stipulated time given by you. Make the mode of payment easy for the tenant. Do not be adamant about making payments in a particular way like certified funds, paying rent for months together in advance, or any other method.
If the rent amount has not been paid for quite a few months, begin the eviction process. A Notice to Quit can be sent to the tenant, which is a warning prior to starting the process of eviction. If the tenant manages to pay the amount within the grace period, tenancy can be reinstated. If not, they will have to vacate the premises. The last attempt for the landlord to collect the rent is by taking the help of professional debt collection services.
Some Interesting Facts on Rent Collection
Some landlords make the tenants pay a small fee along with the rent in case they pay their rent late. This encourages tenants to pay their rents on time. A clause in the lease agreement can also state that habitual late payment of rent will be treated as a breach of the lease contract. Also mention that in such a case, you as the landlord have the right to evict the defaulted tenant. This can allow you to evict the tenant if you are convinced that the tenant might continue to delay payments.
Rental agreements must also have a provision for a compensation part of the tenant in case a check given by them bounces. You need to be reimbursed for the amount your bank charges you. This amount should be charged apart from the late payment fee. Work out a collection method based on an equal balance between all the above factors.