One of the biggest headaches you deal with is tenants who don’t pay their rent on time or not at all. Even though your property management company has created a straightforward rent agreement and has set a system in place to ensure timely payments, some renters do not adhere to the guidelines.
The good news is that you have options for collecting rent past the due date. Property management companies such as Gassen can do much of the work for you.
Below is some rent collecting advice from professionals who have been there time and again.
The Lease Agreement: Thorough and Easy to Understand
A healthy business relationship between landlords, management companies, and tenants starts with a clearly defined and easy to read lease agreement. The tenants must understand the terms and conditions of the agreement before they sign the documents.
The lease agreement needs to include at a minimum:
● Acceptable forms of payment such as a credit card or check - no cash payments
● Where and how the rent is to be paid. Does it need to be mailed or delivered?
● Late fees if payment is not sent by the due date
● Return check fees
● Outline consequences for late payments or failure to pay at all.
Contacting the Renters if They Fail to Make Payments
You need to have a process for contacting the renters if you do not receive payment according to the lease. You need to go over the process with the client along with the lease agreement.
The Fair Debt Collections Practices Act (FDCPA) outlines guidelines for contacting clients. Review this information before contacting the clients. This will help you stay within the guidelines.
You may want to go through Gassen for all communications. If you feel, however, that you need to contact the tenants yourself, always have a friendly tone and minimize confrontation as much as possible.
Detail the Late Payment Policy in Clear Terms
Like all other documents, the tenants need to clearly understand what will happen if they continue to make late payments or if they fail to pay rent.
The policy should include:
● Late Fees
● Continued Late payments
● The client fails to make payments
● All other legal notices including settlements if you hire legal services
If you are to be effective with your policies, you need to enforce them or empower your property managers to enforce them. You need to be consistent and firm when necessary.
Property Management Debt Collection
If the tenants refuse to pay rent, you have the option to proceed with debt collection.
You may have to go through a property management debt collections company that will act on your behalf. You may also have to file a claim and present your case to a small claims court. The court may ask you to provide documents to verify your claim.
If so, we recommend that you provide the following documents:
● Tenant application
● Lease agreement
● Itemized list of past due amounts
● Any attempts to contact and notes
● A timeline of attempts to contact and when notice was given of late payments or eviction
Gassen can help you present the necessary documents and file your claim. Although you may not recover all rent money, you may want to negotiate a settlement with the tenants.
Property Management Services in Minneapolis
Gassen can help you with tenant interaction. We offer comprehensive property management services in Minneapolis, Minnesota.
To schedule a consultation with one of our management specialists, call us at 952-922-5575, or you can message us on our contact page.