Rent arrears; it’s surprising how many people each week are still Googling what that means. Unless of course you’re a landlord. In that case you’ll be well aware of what rent arrears are, and the consequences.
Last year rent arrears made up 7,500 of 12,300 tenancy tribunal orders lodged in New Zealand. This has led to tighter conditions around rent records and follow up on late payment consequences, in order for landlords to comply with insurance obligations. Unsurprisingly, it has also encouraged a surge in demand for automated rent collection tools that make collecting and tracking rent easy.
How can you be proactive about preventing rent arrears?
After you’ve done your due diligence with background checks and reference checks, your next line of defence is your tenancy agreement.
Written in your tenancy agreement will be details outlining the rent payment method, the amount, and the frequency. This will be alongside a section clearly stating the consequences for any late rent payments.
Your obligations as a landlord are to keep track of rent weekly, to provide tenants with a receipt when they request one, to keep a rent book, and to give the immediate and proper notice if rent does go in to arrears.
These obligations exist to protect both yourself, and your tenants when it comes to rent payments.
How does automated rent collection help?
We’re glad you asked! Grove’s automated rent collection does all of the admin for you. Grove collects the rent, reconciles payments and receipts your tenant without you lifting a finger.
When rent is due, Grove sends your tenants a friendly reminder. Once they pay, they will automatically receive a receipt to keep for their own records.
That’s the tenants covered, so what about landlords?
Landlords, you will get a notification popping up on your phone as soon as rent is paid. No more tedious scrolling through your account transactions to find payments. And, the payment is always the exact amount you’re expecting. If you’ve ever used a property manager, you can be left wondering what expenses or deductions are coming out of your rental income that week.
What happens if rent is going in to arrears?
Is rent late? Or less than what you have agreed to? Your tenant will be getting a friendly reminder from Grove straight to their inbox. This lets them know what the issue is; the amount they need to pay, and the date that it needs to be paid by. Landlord insurance requires you to give written notice when rent is in arrears, and it’s great having Grove to do the job for you.
Grove sending this reminder on your behalf means that you don’t need to remember to do it, and you comply with insurance – awesome! Additionally, a professional email from an objective third party removes some of the awkwardness that comes with speaking with your tenants about rent arrears.
You’ll never be able to prevent rent arrears entirely, but taking extra precautions, being diligent, being clear with communications, and complying with insurance obligations will ensure that you’re doing the best to minimise the risk. Grove helps you to prevent rent arrears by;
- Sending instant notifications when rent is paid
- Automated rent reconciliation
- Automatically sending tenants a receipt
- Automatic notifications when rent is late or underpaid
- Up-to-date notifications when rent is missed
Be one of the first to try Grove Rent and sign up for early access today.