In today’s difficult economy, a critical indicator of a property manager’s success is their effectiveness in controlling overdue rents.  A well-run property should not have chronically delinquent tenants.  However, when delinquencies occcur, immediate action must be taken.  A rent roll listing all delinquent rents should be prepared showing the rent and all other balances for all tenants.  In addition, property managers should provide a delinquency report recording the manner and all  collection attempts for each tenant.

When initial notification of the delinquency does not help, the property manager should review the lease’s termination rights and consider potential legal action against the tenant.  Should a delinquent tenant vacate the premises, late charges and legal fees should be deducted from the security deposit.

Finally, if repeated notices and personal visits by the the property manager fail to remedy the delinquency, the manager should contact legal counsel, research the relevant landlord-tenant laws and prepare to file eviction proceedings for non-payment of rent.

Each month, the property manager should review the delinquency report outlining all telephone calls, personal visits, notices, and other actions taken in an effort to collect the rent.  This report, along with the rent roll, will help determine what legal action, if any, should be taken against the delinquent tenant.

Tenants who generally pay rent on time should be granted an extended grace period in which to pay.  In many cases, the initiation of legal action will induce habitual late payers to remit rent monies owed; however, eviction procedures should begin immediately for tenants who are suspected of abandoning the premises, as well as for those who continue to refuse to pay.  Copies of the tenant’s lease and the rent roll should be forwarded to the attorney to commence legal action, together with the deed for the premises and a certificate of good standing for the owner.