Property managers have different roles and duties in the management of properties. Some of them are:
- Selection of tenants
- Rent collection
- Administration of service charge (if it’s a serviced apartment)
- Ensuring that the property is kept in a good and clean condition
- Sorting out of Utility bills
- Remittance of rent to property owner
- Maintenance and Repairs
- Keeping financial records
Our focus will be on Rent collection. It is one of the hardest tasks involved in property management. Rent collection first starts from reminding the tenant about the due date, the amount and payment method and actually collecting rent whether through bank transfer or cheque. The issue now begins when the tenant defaults in payment for one reason or the other. Some tenants may be apologetic and ask for a little more time to get funds while some remain adamant and insist on not paying. Property owners who manage their properties themselves often have challenges with this because they do not have the requisite knowledge on how to deal with this.
The first thing that goes to one’s mind is to become as difficult as the tenant is, while this looks cool, it may not really yield the required results. Litigation may also come into one’s mind, this has also worked out well in recent times but it requires patience, money and consistency.
Mediation is one of the Alternative Dispute Resolution used in resolving issues. Mediation, according to FindLaw, is a procedure in which the parties discuss their disputes with the assistance of a trained impartial third person(s) who assists them in reaching a settlement. It may be an informal meeting among the parties or a scheduled settlement conference. The dispute may either be pending in a court or potentially a dispute which may be filed in court. Cases suitable for mediation are disputes in commercial transactions, accommodation rent issues, personal injury, construction, workers compensation, labor or community relations, divorce, domestic relations, employment or any other matters which do not involve complex procedural or evidentiary issues.
In Lagos Nigeria, Citizen Mediation Centre (CMC) is a working body which helps to resolve issues between citizens. Using a property in Ogba, Lagos as an example, a tenant owed rent for two (2) years and didn’t pay. The tenant was a commercial tenant and the excuse was that business has been very slow. They did not want to move out as well and the management company didn’t want to consider Litigation as an option. They went to CMC, submitted the case, the Representative scheduled a meeting between the company and the tenant, then letters were dispatched. On the scheduled date, both parties were in attendance, the Representative of CMC talked to the management company individually to know what they actually want, after both meetings, they all came together and they heard what the tenant had in mind. The tenant wrote an Undertaken letter indicating when and how he would pay his debt and he was given a Memorandum of Understanding (MOU) to tick his preferable options. When the time came for the first payment, the tenant paid and he was finally able to discharge his debt. The tenant in question still occupies the apartment. In this example, we have seen how Mediation helped in avoiding strain in our relationship, more importantly, it was a medium used to settle the debt.
This was also easy because a management company handled it and it was sorted out by two professionals. We, at Samson Agbato Consulting have expertise in solving property-related problems.
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