EFFECTIVE TACTICS FOR Rent Recovery

ESV Olatunji Adeyemo

Introduction

Rent collection, tenant selection, property maintenance, and legal compliance are just a few of the many facets that make up the dynamic and demanding task of managing rental properties. Rent recovery stands out among these factors as a crucial issue that property management experts must deal with (Dabara et al., 2012). Rent recovery refers to the pursuit of overdue rental payments.

Rental arrears are sometimes caused by tenants’ financial hardships, including job losses, economic instability, and other financial limitations. This presents a big challenge for property managers, who work hard to keep a consistent income flow to pay for the maintenance of the property and satisfy owners’ obligations (Gbadegeshin and Oletubo, 2013). Additionally, each tenant group presents unique challenges related to rent recovery, such as cultural differences, language barriers, or unfamiliarity with rental contracts and obligations (Opoko and Oluwatayo, 2014).

Causes of Rent Default  

Rent default refers to the failure of a tenant to fulfill their financial obligation to pay rent as agreed upon in the lease or rental agreement. It occurs when a tenant fails to make the required rent payments within the specified time-frame or consistently falls behind on rent payments (Oni, 2011 cited in Okundalaye, 2023).

The major causes of rent default are the financial burden of the tenants (Daramola and Aina, 2004), employment status (Daniel et al., 2017), tenants’ unwillingness to pay rent (Topham, 2012), low level of satisfaction derived from the facility (Adebisi and Bankole, 2022), failure of the landlord to fulfill their obligations outlined in the tenancy agreement, and instability in tenants’ income (Sani and Gbadegesin, 2015). Other factors are bad economic conditions, deteriorating dwelling unit features, poor management and maintenance services, difficult tenancy arrangements, deteriorating and poor external building attributes, and frequent rent reviews (Kemiki et al., 2018).

Effective Tactics for Rent Recovery

A vital component of property management is rent recovery, which keeps a consistent income flow and guarantees property owners’ financial security. Effective approaches or tactics must be put into practice to improve rent recovery. Below are some of the tactics suggested by Odebode et al. (2022) and Okundalaye (2023).

1. Adequate Maintenance: A key factor in rent recovery is adequate maintenance. Tenants who live in well-maintained properties are typically happier. Hence, they are more likely to make their rent payments on time and remain in the property for longer when they are happy with their living arrangements. A contented tenant is less likely to break the terms of the lease or incur arrears. 
2. Rent Reminder Notice: Tenants who receive regular reminders on rent due dates, late fees, and payment options are better able to fulfill their responsibilities and avoid any misunderstanding. Effective rent arrears management requires frequent and transparent communication with tenants. Tenants should be informed right away if they are behind on their rent. Keeping written correspondence is crucial for audit trail purposes.
3. Dialogue Approach: ESVs may find it difficult to collect past-due rent, but using a dialogue-based approach can be a very successful tactic. The dialogue approach places more emphasis on open communication, empathy, and cooperation between landlords (or their agents) and tenants, as opposed to confrontational or punishing approaches. To manage the difficulties of recovering rent arrears while maintaining their relationships with renters, landlords or their agents should actively listen, provide flexibility, and be ready to escalate when needed. In addition to helping the parties immediately concerned, this tactic promotes a more robust and peaceful rental market, and fosters positive, long-term landlord-tenant relationships.
4. Rent Tribunal: Rent tribunals are independent bodies established to mediate and resolve disputes between landlords or their agents and tenants, including those related to rent arrears. This approach provides a structured and legal framework for addressing issues, to achieve a fair and equitable resolution for all parties involved. Their key features, including legal oversight, neutrality, expertise, formal processes, enforceable decisions, mediation, and efficiency, make them a valuable resource for landlords or their agents and tenants. Although it may not always be required, a rent tribunal offers a dependable and equitable method of recovering rent that guarantees all parties adhere to the rules and regulations of landlord/agent-tenant relationships. To get the most out of rent tribunals, both landlords or their representatives and tenants must understand their rights and obligations under the rules and abide by the tribunal’s rulings to prevent additional legal action.
5. Court Action: Legal action should be considered as a last resort, to be utilized only when all other options have been exhausted. It will be contemplated in situations where tenants fail to comply with payment agreements to reduce their arrears and do not cooperate despite reasonable attempts at arrears recovery.