How to manage and prevent rental arrears effectively

As property management specialists based in Mount Lawley, one of the most critical aspects of our role is effectively managing tenant arrears. Rental income is the cornerstone of any investment property, and when payments are delayed, it can quickly become stressful for landlords. Our job is to make sure measures are in place to prevent late payments in the first place.

Here’s a look at our structured arrears handling process and how we help protect our landlords’ investments.

Daily Monitoring of Rental Payments

We use Property Tree, a property management software system, to keep a careful eye on rent payments every day. This lets us quickly find any tenants that are behind, so we can address it right away.

Early detection is key. The earlier we’re aware of a missed payment, the easier it is to resolve before the situation escalates.

Step 1: A Friendly Reminder

We send the tenant a polite SMS and/or email reminder on the first day the payment is late.  Often, arrears at this stage are the result of an oversight, a forgotten payment or a bank delay. A simple reminder is usually enough to prompt action.

This first interaction sets the tone: professional, respectful, and clear.

Step 2: Follow-Up Call

If the payment is still not received within 3 days, we follow up with a phone call. This lets us talk to the tenant directly to find out why they are late and figure out if it's a one-time thing or something more serious.

Open communication at this stage is essential. It gives us the opportunity to discuss possible solutions and reinforces the importance of maintaining rental payments.

Step 3: Breach Notice (if applicable)

If the rent remains unpaid after 7 days, we then issue a Breach of Agreement notice. This formal document gives the tenant a specific timeframe (14 days) to rectify the arrears.

Issuing a breach is necessary because it preserves the landlord's interests and gives the tenant one last chance to pay their remaining rent.

Step 4: Termination Notice (if unresolved)

If the tenant does not comply with the breach notice and arrears continue beyond the required period, we issue a Notice of Termination for non-payment of rent.

While eviction is always a last resort, protecting your investment is our top priority. We follow strict legal procedures to ensure everything is done correctly and fairly.

Keeping Landlords Informed

We understand that rental arrears can be unsettling, which is why we keep our landlords fully updated every step of the way. You’ll be notified promptly of any notices issued and advised of any resolutions achieved.

Our team is here to help you with any queries you have throughout the process.

Prevention Through Strong Screening & Education

The best arrears management starts long before a lease is signed. We carry out thorough tenant screening to ensure reliable applicants are approved. This includes rental history checks, employment verification, and financial assessments.