One of the most common sources of anxiety for property managers, landlords, or members of the board of homeowners associations is handling late payments, whether rent, dues or monthly fees. While not an enjoyable part of the job, it is seemingly inevitable that someone will be late at some point during your tenure as a property manager. Knowing how to deal with this somewhat sticky situation is a critical part of the myriad of tasks for managers.
Capital improvements such as electrical upgrades, installation of new roofs, and plumbing upgrades are just the start of what rent and dues cover for unit owners. Other services such as trash pick up, driveway and parking lot care throughout the four seasons, landscaping, and facility maintenance are among the long list of things that are taken care of from the funds.
If rent or dues (in an HOA) are not paid regularly and on time, these services may be significantly impacted. The lack of prompt payment can, in turn, negatively impact the successful management of the entire community. In a worst-case scenario, repairs may not be able to be made or financial bankruptcy may be considered.
Create an Established Course of Action
When homeowners (in an HOA) or renters in an apartment sign a lease or buy a condo in your community, have a written agreement that each party signs clearly spelling out the consequences of not paying on time.
Initially, when a late payment is noticed a friendly reminder email or phone call to remit payment can be made by the landlord or HOSA board. If this course of action does not remedy the issue a demand notice may be sent. This statement will explain what is due and that fees will accumulate as each day passes.
Depending upon the circumstances and whether this is the first time this has happened, a property manager may waive late fees or work out some sort of payment plan.
If all else fails, services may be limited for this unit or a lien may be filed in court against the property dwellers.
Most HOAs and landlords would like to spare the expenses of going to court. Therefore processes should be put into place within communities to catch late payments immediately and work out remedies that help the community continue on as well as the unit owner pay their obligations in a timely manner.
Some communities use automated payment systems, reminder notices that are generated automatically prior to each month’s payment date, and options if hardships exist.
For more information on setting up payment plans and how software can help your property with payments check out our website and property services.