Landlords, Here’s Why You Don’t Receive Rent on the Same Day Every Month
We understand how vital it is for you as a landlord to collect your rental payments on time each month. We often get asked, “When the rent is due on a particular date, why does the owner not receive their rental consistently?” Here we outline our process and some of the reasons for why rent can be paid on different days.
Our process helps us to stay on top of rental collections for our Landlords
As a real estate agent that has the interests of both landlords and tenants in mind, we strive to keep the process as transparent and practical as possible while maintaining a zero tolerance policy to rent arrears.
We know that your rental may be affected by banking downtimes and that the downtime period can be as long as three days. Therefore, we consider it reasonable and courteous to allow two clear days after the rental due date for payment to be received without sending an ‘Arrears Alert’ to the tenant.
After two clear days have passed, we issue an SMS alert, often along with a reminder email. For example, if rental is due on the 14th and, it is not received by the 16th, we immediately notify the tenant that they are in arrears. We also keep the landlord in the loop so, they know that the delay is being tracked and managed. This helps to keep things moving seamlessly.
In case the tenant refuses to respond to an alert or doesn’t receive the alert (they may be out of contact), it will then move into a five-day period, and we contact them again. You can check out our complete arrears process here.
Getting your money to you on time
We maintain an agency trust account where all rental payments we receive are directed to. This is something every licensed real estate agent must have in order to lawfully manage other people’s money.
When a tenant pays their rental, it is kept in trust until it is disbursed to the landlord or the nominated third parties on behalf of the landlord.
At Silver Service Real Estate, we have chosen Tuesdays and Thursdays to disburse all trust monies that are due and payable. That’s because we have observed that any funds that are due over the weekend are well and truly cleared by Tuesday as long as they have been paid on time.
In case any pending funds come into our trust account after Tuesday, we clear them on Thursday. The trust account is non-interest-bearing, so there is no reason for us to withhold funds unnecessarily.
Weekends or holidays may come in the way
Sometimes, when your rental due date happens to fall on a weekend or a holiday, the bank will process the payment only on its next working day. For example, let’s consider that your tenant has agreed to pay the rental on the 15th of every month. Now, on any given month, if the 15th falls on a Saturday — which is technically a non-banking day — rental won’t be received on that day, even when the tenant has paid their rent on time.
Moreover, Saturday, Sunday, and Monday are affected by banking downtime, so the first possible day on which you can receive that rental will be Tuesday (18th). This means the rent that you were supposed to receive on 15th got pushed down to 18th simply because the banks work in a certain way.
Here’s another thing to consider: If in the above example, Monday turned out to be a public holiday, receipt of rental would be delayed by another day.
Bank cut-off times
So if your rental due date falls on a weekday and there’s no holiday or weekend in the offing, there shouldn’t be any delay, right? Wrong!
Banks have cut-off times — the latest time within which they accept and effect payment orders to and from customers. The cut-off time can vary from bank to bank. If your tenant pays their rent on the due date but misses the cut-off for that day, funds may not clear into the receiving account on the next banking day.
Missed due dates
Whether intended or not, a tenant doesn’t always pay their rent on time. There could be a variety of reasons for why your tenant may be behind on rent — they may forget when their payment is due, they may be too busy to keep track of the due dates, or may suffer from a cash crunch around that time. Whatever may be the reason, it helps to have a process in place to ensure stress-free rent collection for both parties. That’s where hiring a property manager like Silver Service Real Estate makes a world of difference!
Now that you’ve seen how banking downtimes and tenant response times affect whether a landlord may or may not receive timely rental, you may ask — Why then should the landlord rely on a rental due date at all?
Well, here’s why. The due date is part of a contractual arrangement. Therefore, it is a reference point for action/discussion when there is a breach of the lease contract and, to lawfully recover rental arrears, if needed. It is, however, never a guarantee.
But this issue can be managed well when the landlord can build trust in their agent and their commitment to getting rental payments coming through on time.
With our ability to always see things from the client’s perspective, we are one of the most trusted real estate agents in Melbourne. As such, we have helped many of our clients get over the stress and anxiety of not receiving timely rental payments through our efficient management and rent collection process.
If you have any questions or need some property advice, please drop us a line or give us a call,
Mariam, Noune, Carolyn, Shelley and the team at Silver Service Real Estate.
Suite 6/8 Bromham Place, Richmond, VIC 3121
PHONE +61 (0) 3 8689 7960
EMAIL; [email protected]