Keeping track of rent is one of your main responsibilities as a landlord, yet many aren't aware of why they should do it. With the majority of people paying rent weekly or fortnightly, there can be a lot of transactions to keep on top of. Not only is tracking rent important for meeting your insurance obligations, it can save a lot of time and stress for both you and your tenants.
Keeping you in line with your obligations
If you were asked for a summary of rent records today, how long would it take you to produce it? Furthermore, getting accurate rent records together in a timely fashion is one of a landlord’s obligations under the Residential Tenancies Act. Section 30 of the RTA outlines that 'Failure to keep records in accordance with this section is hereby declared to be an unlawful act.' Having up-to-date rent payment records that are easily accessible will save a lot of time and stress if any issues arise.
Did you know that rent records must be kept for seven years? Consequently, relying on searching bank statements to track rent payments can pose a few risks. You could be in for a very long night of reading if your tenants request rent records from several years ago.
Being on top of rent payments also gives you peace of mind, knowing that there aren’t any unpleasant surprises awaiting you when you next open your bank statement.
Better for you, better for your tenants
Tracking and reconciling rent payments is great for the people who are paying to rent your property. Having clarity around what amount of rent should have been paid, and when, is absolutely vital for great relationships between landlords and tenants.
It’s not uncommon for people to miss the odd rent payment. Changing bank providers, changing relationships, changing jobs and changing pay cycles; there are numerous reasons why rent might go in to arrears and many of them are honest mistakes. It’s how you deal with missed rent that matters. A quick follow up email or call to your tenants might be all you need. Knowing exactly when rent has been paid, or when it hasn't, can help to resolve rent arrears well before they become an issue.
Compliance with insurance – Are you doing enough to be covered?
Policies vary between providers, but tracking rent on a weekly basis is a common requirement under landlord insurance. Rent arrears can happen to anyone; life gets busy, and mundane tasks like checking banking transactions can fall by the wayside. When you finally get around to looking at the status of your rent payments you could be in for an unpleasant surprise.
AMI Insurance requires landlords to ‘monitor rents on a weekly basis with written notification being sent to the tenant(s) whenever rent is 14 days in arrears’.
AA Insurance has slightly different criteria; ‘You must monitor rent in arrears. You or the person who manages the tenancy on your behalf must:
• notify the tenants in writing when the rent is 7 days
• personally deliver a second letter to the tenants
when the rent is 14 days in arrears’
Having landlord insurance will give you more peace of mind, but remember it’s a two way street. Unless you’re doing your best to prevent rent arrears yourself, and are meeting the obligations set out in the policy, you may not be covered.
Less stress for you
Running a business always has its challenges, but being a landlord doesn't need to be stressful. It's a good idea to get some of the repetitive everyday tasks like tracking rent sorted. Then you'll have one less thing to worry about should any issues with rent payments or rent arrears arise.
Read more: How Grove helps to prevent rent arrears
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