There are a number of reasons that a tenant can become delinquent. Some of these situations cannot be predicted, such as industry conditions that negatively impact the business or growth that is too rapid. However, there are signals of potential delinquency that can be revealed during the initial and renewal application process.
Whatever the reason, a delinquent tenancy rarely ends well for the property manager.
While there are steps you can take to pursue a delinquent tenant, the best way to protect against the costs associated with delinquency is to put preventative measures into place.
Credit Reports are the perfect tool for doing so. Whether you are screening a prospective tenant or verifying a renewal tenant’s current position, credit reports can help uncover information that indicates the likelihood of delinquency.
Screening Prospective Tenants to Reduce Delinquency
Changes in the business landscape are making it increasingly more important for property managers to thoroughly screen prospective tenants prior to leasing commercial property to them.
By reaching out to references and verifying your prospect’s corporate standing, bank ratings, professional credentials, and other background information, you can ensure that the tenant you choose is qualified and whether they are likely to become delinquent.
Screening Renewal Tenants to Reduce Delinquency
Similarly, screening current tenants at regular intervals, especially when their lease is due for renewal, can help ensure your tenant can continue to meet the obligations of your lease agreement.
While your tenant may have been reliable up to this point, many things can change in a short period of time that could jeopardize their ability to pay rent on time and in full on a go forward basis.
Approaching your renewals like you would your prospective tenants, with increased due diligence, will better protect your investment.
What If Your Tenant Becomes Delinquent?
Sometimes you can take every reasonable precaution to avoid a delinquent tenancy and it still happens.
At a time when the scales of justice seem tipped in favor of the delinquent or "bad" tenants, deciding whether to proceed with a legal action is an important step in the debt recovery process.
There is nothing worse than investing time and money into the recovery of delinquent rent payments only to discover that your tenant does not have the assets available to make repayment.
That is where our Asset Accumulation Report comes in.
Our Asset Accumulation Report was designed with your skipped and delinquent tenants in mind. It’s the most comprehensive report offered in today’s market and has been successful in assisting property management professionals to make the best decisions regarding the next course of action. This report will identify assets and liabilities and locate the tenant for service purposes.
This report will help you make decisions at different stages, from the time the tenant first falls into arrears to the time the tenant makes the midnight move. The report also assists landlords who are dealing with a rent abatement situation or considering terminating a tenant's lease for unpaid rent.
A simple database “snap-shot” only reveals a part of your tenant’s financial story.
At Quality Credit Reporting, we specialize in creating flexible, in-depth reports that deliver the most valuable ad comprehensive information available, providing you with the negotiation tools you need to secure a lucrative and stable tenant, as well as recover unpaid rent, whenever necessary.
Tags: Property Management
