First-time Landlords: Tips for Collecting Rent on the Dot

Renting out your commercial properties can be a rewarding business venture if you’re able to collect rent on time. Of course, collecting rent on the dot is easier said than done. There are plenty of tenants who either miss payments or stop paying entirely, and this is when the process of collecting your dues gets complicated. As a landlord, you’re protected by Commercial Rent Arrears Recovery (CRAR) which allows you to take control of tenant’s goods and sell them.

However, before you claim unpaid rent from a commercial tenant, you need to make sure that the arrears must be at least seven days’ worth or more when you serve the notice and at the time of enforcement. You also can’t seize the tenant’s goods yourself. This can only be done by a certified commercial rent recovery enforcement agent. Once they take over the process, they’ll issue a seven-day notice to your tenant. If rent has not been paid during the time of enforcement, the agent is allowed to enter the property and take control of goods to be sold at a public auction.

Before you go down this route, there are other less complicated options that you can consider too. Here are other alternatives you can try out:

Automate payments

An auto-pay system ensures that you can collect rent on time since it gets deposited automatically to your bank account on its due date. There’s no excuse for your tenants to forget their rent or miss their payment. Some major banks have an online bill pay feature that can collect a certain amount of money every month and you can also ask your tenant to write you post-dated checks.

Post reminders

Besides automating payments, you might want to look into automating reminders as well. Reminders are a good way to prompt your tenant to start preparing their rental fee, especially if you send the reminder a few days before the rent is due. It’s easy to set this up through phone calls, text messages, or emails.

Offer incentives for early payments

Encourage your tenants to pay early or on-time by rewarding them for this behavior. For example, you might want to offer a small discount on next month’s rental fees This also allows you to show your appreciation to them for being a responsible tenant and motivate them to continue paying on-time.

Communicate with your tenant

couple renting house

Try to find out what went wrong with your tenant’s payment. Instead of being aggressive, try to be open-minded and cooperative. Work with them to find a solution as to how they can pay you what you’re owed. Don’t get too pushy, though, since contacting your tenants frequently to discuss missed payments may be classified as harassment under the Protection from Harassment Act of 1997. As much as possible, try to strike the right balance.

Enforce late fees

Adding a late fee policy is a great way to let your tenant know that you mean business. Rent is expensive enough as it is, and nobody would want to add a late fee on top of that.

A missed payment out of the blue may not necessarily mean your tenant is trying to rent your place for free. Keep in touch with your tenant and keep an open line of communication, but be firm but reasonable when collecting rent.

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