Most landlords are familiar with “that” tenant — the one they’re constantly having to chase up for overdue rent. Recent research suggests that 68% of landlords have experienced problems with rent arrears and late payments, but a new application could make it harder for tenants to miss payments, while at the same time rewarding the more conscientious among them.
Many tenants will once or twice in their tenancy miss the date for rent payment by a day or two. This isn’t usually a problem, but there are a few serial late payers. As Lincoln-based PAID & CO puts it, “Financially astute tenants often cancel standing orders ahead of when rent was due, effectively using their rent payments as an ‘unofficial overdraft’ to help meet other living costs.”
A reliable payment system that can’t be cancelled would go a long way to reducing this problem, and that’s what PAID & CO claim to have produced.
The PAID & CO System
The new system is a cloud-based application using BACS to withdraw the rent on the due date. It’s quick and easy for the tenant to set up — but, crucially, the tenant can’t get away with unilaterally cancelling payment behind the landlord’s back. The landlord has access to a dashboard giving a real-time picture. Besides making it possible to track tenants’ payment patterns and identify serial late payers, it also allows easy and quick reconciliation.
The advantages aren’t only for the landlord, though. The company claims that regularly prompt payments through this system will be reflected in the tenant’s credit ratings from the three major UK reference agencies. They’ll also receive SMS and email reminders of payment dates, making it easier for good tenants to keep up to date.
Will It Work?
According to PAID & CO, “We designed our system to remove the hassle from rent collection and, through greater transparency, foster a positive, collaborative approach between letting agents and tenants. Letting agents will have much less administration, and tenants will get recognition of good rental payment which will support an improved credit rating.”
Like any system, the only way of knowing whether this will deliver the benefits claimed is to watch it at work. If it does prove to be everything it’s cracked up to be, though, it should make the landlord’s life a good deal easier and at the same time deliver benefits to good tenants. In fact, the only people likely to lose out are tenants who try to avoid paying their rent.