Saturday, December 08, 2007

Tenant default

One of my tenants failed to pay this month's rent when it was due last week. I have had the agent contact her and she has promised to make the payment on Monday. I have also repeated an earlier request for her to set up a standing instruction (which all my other tenants have done). She declined without giving a reason.

Tenants who fail to pay on time every time are, quite frankly, a pain. Given that I do not want to leave any more money in the non-interest bearing account used to collect rent and make the mortgage payments than absolutely necessary, unreliable tenants force me to keep the float in that account higher than I would like. I now add a clause to my lease agreements requiring tenants to pay by auto pay. While this does not guarantee that a tenant will not default, experience to date shows that auto pay significantly reduces the risk of late or missed payments.

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