Debt Collection Begins Before Your Tenant Ever Moves In
The information that a landlord collects during a thorough tenant background check is the same information that a debt collection company will use to collect tenant debts.
“Your tenant debt recovery efforts start before the tenant moves into your unit,” says Dan Page, a representative of tenant debt collection company Fidelity Information Corporation.
It pays to plan ahead in case things take a bad turn later on,” Page says.
Page recommends that a landlord take steps to maximize debt recovery before a tenant defaults. For instance, tenant screeningshould begin with probing questions on the phone when the applicant sets an appointment, followed by requiring an applicant to complete every question in the rental application.
“Blank spaces on the application compromise your ability to collect tenant debt. Each blank space equates to money lost,” Page says.
References are crucial to tenant debt collection. “I tell all our clients to require three personal references and three emergency contacts, all of which are different people,” Page says. “In the unlikely event you find yourself in a debt collection situation, this information is priceless,” he adds.
Of course, these references are of no use if the landlord does not verify each one during tenant screening.
Another important action landlords must take to maximize their ability to collect tenant debts. Update the tenant screening reports and rental application information for longer-term tenants, as often as every six months or so. A landlord may also wish to require the tenant to immediately inform the landlord of any changes to employment, banking and reference information that the tenant provided.
“No one likes to think that their tenant will rip them off, but it does happen. Don’t think like a victim. Be proactive, and give the debt collector some ammunition to locate the tenant quickly, and get your money back,” Page says.
This post is provided by Landlord Tenant Rights to help landlords and property managers reduce the risks of rental income loss. Landlord Tenant Rights provides articles on Reporting Tenant Rent Pay and Tenant Screening to ensure the necessary information is readily available to all Landlord & Tenants.
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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.