5 Steps to Collecting Unpaid Maintenance Fees, Common Charges and Rent !

Step 1 – Notification When it comes to unpaid maintenance fees, common charges, and/or rent, the sooner you take action, the better. If fees are not paid by the 10th day of the second month for instance, your managing agent should immediately mail a 5-day delinquency notice informing residents of their unpaid maintenance fees, common charges and rent.

The letter should remind residents to either pay immediately or contact the managing agent’s collection department to avoid the following steps listed below. If contact or payments are not made within several days of the notice, the manager must make every effort to call, email or meet with the resident to get a better understanding of the problem and set up a mutually agreeable payment plan.

In addition, the Board of Directors/Managers should receive a monthly arrears report from the managing agent to keep a closer eye on the uncollected debt.

Step 2– Warning and Forfeiting Privileges
In many cases, assigned parking is a privilege, even if the resident is paying for their parking space. Residents in arrears should be notified that they are in jeopardy of losing their parking space if payment is not received. This action will typically result in the resident, at the very least, agreeing to a payment plan to pay back maintenance fees, common charges or rent.

Step 3– A More Aggressive Collection Approach
If fees are still not paid, non-contractual maintenance services that are not required by the Department of Buildings/Code Enforcement should be withheld. It is necessary that the property manager communicate to the superintendent that residents in arrears should not be provided these non-contractual services.

Step 4 – Late Fee Policy
If a late fee policy is not in place the managing agent should encourage the Board to create a policy whereby a late fee is placed on the residents account when payment is not received by a set date, typically the 10th of each month.

Step 5 – Collection Attorney
If a resident’s account remains unpaid after one month and ten days, the account should be turned over to a Collection Attorney who specializes in landlord/tenant matters. Very often the attorney will ask the judge for legal fees, so there are no out-of-pocket expenses to the property owner.

Unpaid rent, maintenance fees or common charges hurt everybody. Now, more than ever, a clear set of rules should be put into place so those in arrears are aware of the consequences.

Published by Precision Management Group
Copyright 2011