Being a landlord could be a tough job, not only would you have to make sure that your property is well-maintained, but you also need to make sure that your tenants pay regularly and have to deal with the massive headache of commercial rent recovery from non-paying tenants. Often, landlords trust that late fees or the fear of eviction would be enough to enforce timely payment from tenants. However, there are more effective ways to manage and promote prompt rent payment.
Let’s explore the steps you can take to make sure that your payment pays promptly, as well as the steps that you can choose to deal with non-paying tenants.
Communication is Key
Communication is an integral part of being a landlord and is as vital in finding out issues with the property as it is with collecting rent payments. Always ensure that your tenants are clear about when the rent is due and the amount, and the options in payment (whether it’s collected in person, done online, deposited to a bank account, etc). You can contact and instruct your tenants over the phone or email, as a general posting on the property billboard, or even in person. It’s important to have more than one medium of communication, and it would be best if your tenant can acknowledge the communication or notice. Sometimes, the issue with late payments or non-payments is simply because of lack of contact between landlord and tenant.
Punishment and Reward
When it comes to prompt payments, landlords often rely on just charging late fees. Although charging late fees is an effective tool to reinforce timely payments, it’s also effective (and perhaps even more so) to offer a reward to tenants that pay on time or early. You can offer a small discount to tenants who are able to pay on time or earlier than the due date. Make sure that you properly communicate to your tenants the late fees and discounts and when they are applicable.
Keep Track, Keep Records
As with all things pertaining to payment and collection, make sure that you keep track of everything. From communication to payment records, and even keep track of when you reminded or talked to non-paying tenants regarding their arrears. You should also keep record of any attempts to contact or communicate with tenants (SMS, letters, email, visits, etc), this would be handy when dealing with non-paying tenants in the future.
Talk to Them If They Can’t Pay
If tenants aren’t able to pay, don’t just proceed with automatically charging the tenant on the day that they’re unable to pay. Try calling or schedule a visit with them, and talk to the tenants as to why they’re unable to pay, and ask when they are able to pay. Perhaps they simply forgot about the due date, or perhaps they’re currently facing financial issues but are willing to pay but just need an extension. This is a humane way of managing your tenants and avoid making them feel like you’re just milking them for rent.
Offer Solutions and Suggestions
It’s better to get paid late than not get any payment at all. So, if your tenant is unable to pay now, offer them staggered payment options, and other payment arrangements that you both would be comfortable with. You can offer an extension, or to have their total rent arrears distributed in future rent payments (e.g. if they’re 2 months late on their rent, you can offer to divide the total sum by 6 and then add the amounts to the following 6 months of rent). Whatever the solution is, make sure that agreement struck between you and the tenant are legal, agreed upon by both parties, and has the appropriate contract and paperwork to avoid any disputes or legal issues in the future.
Landlords should take note of all these steps to ensure that tenants pay promptly, as well as when dealing with non-paying tenants. However, if you’re having trouble with a difficult tenant or simply wish not to stress yourself out with collection of rent arrears, you can always take legal action and/or employ a private bailiff to help you with commercial rent recovery.