Commercial rent collection involves more than checking whether a payment has arrived. For landlords, it means knowing what is due, keeping accurate records and acting promptly when a payment has not been made correctly. There are occasions when accepting rent after expiry of a Lease, could prejudice your legal position.
Proper records are kept utilising a specialist property management software package, used by many of the large surveying practices.
A consistent, transparent approach helps owners understand their property’s income and make informed decisions when issues arise.
Keeping rental payments on track
The starting point is an accurate record of the lease requirements, payment dates and amounts due. Where payments are received for things other than rent, such as insurance or repairs, monies need to be allocated correctly, to avoid misunderstand and make any future debt collection efficient. Payments are monitored to establish payment patterns so that problems can be identified early. Our system allows for us to track both invoices and payments and provide evidence where requested.
Where a discrepancy arises, the next step is to establish the facts. Has the tenant used an incorrect payment reference? Is there an unresolved query? Or is the business experiencing financial difficulty?
Understanding the reason helps the property manager advise the landlord on an appropriate response. This is help through regular engagement with the tenant. Our standard rent collection contract includes 3 monthly inspections. Whilst these inspections allow us to access the overall condition of the property and any areas of disrepair, it also gives us an insight into the occupier. For more local tenants’ it ideally will allow us to speak directly with the business owner.
Landlord statements are issued quarter (or more frequently if requested). These reports ensure landlords are kept up to date with matters relating to their property.
Following up commercial rent arrears
Consistent follow-up helps ensure that outstanding payments remain visible. Recording contact with the tenant, any explanation provided and the next action gives the landlord a clear account of progress.
For example, a partial payment might initially appear to be an administrative issue. If it continues, the landlord needs to understand the outstanding balance, the tenant’s explanation and their options.
Some matters can be resolved through communication. Others may require specialist legal advice. The appropriate response will depend on the lease and the circumstances.
Rent Statements and Reporting for Landlords
Clear arrears reporting and escalation procedures including coordination with solicitors or debt collection agents when recovery action is required.
Good reporting should help a landlord answer practical questions:
- What rent was due and what has been received?
- Which balances remain outstanding?
- What action has been taken?
- What needs a decision or further advice?
Commercial property management across the South West
At Vickery Holman, commercial property management sits alongside lease advisory, commercial agency, building surveying and other specialist property services. Where an issue requires additional expertise, our team can help coordinate the appropriate advice.
Contact our Property Management team to discuss our commercial rent collection and the management of your property.
