Simon Dewsberry Posted June 10, 2007 Report Share Posted June 10, 2007 Hi All I have rasied this as a topic as most people do not seem to have any idea how to deal with debt problems ! You are owed money - a debt - this is due for collection , you may either persue the money yourself or you can employ a debt collector to act as your collecting agent at any time. This is normal business practice , first an invoice is sent, then a reminder, if debt remains upaid it will go to the accs overdue section of a company, who will try to recover monies, if this fails then a deadline is set, at which point the debt will be handed over to a debt recovery service(Debt collector) these guys come in various shapes and sizes, some will buy the debt(for alot less than its true value) some will charge an upfront fee, some will charge a percentage of monies recovered, the best are the "no win, no fee" and "fee" payable by the person who owes the money. Only as a last resort do you go to court over money - as it is time consumng - has real unrecoverable costs in order to set it up and facilitate, and the reality is that you are "fairly" unlikely to get all of the debt repaid -much more likely to get a pittance paid weekly or monthly then the problem of going back to court to reinstate this(when they stop paying) or bailiff action which generally once again will leave you out of pocket ! If you set this up "Properly" within your ast with daily late payment fees, admin charges for reminder letters, a clause the states all costs in recovering outstanding debt will be bourne by tenant, daily interest plus DC fees etc Then you can invoke these to pass all of these cost to a the T - now if as a tenant you £500 bill is going to turn into £ 800 by the end of the month, this alone is usually enough motivation for them to pay it and quickly !(or at least negotiate a suitable repayment plan ) Normally i will accept payment of debt only, and WIPE OUT ALL COSTS- just accepting the original debt -this is on the understanding that they stick to the agreed(in writing)payment plan- should they renage then all previous costs plus what ever else has accrued since will be added to the amount and THEN and only THEN will be passed to DC -I also explain that once the DC has taken case on, DC fee will apply and cannot be removed and that i will have little or no control over the collection process. So it is a good idea to pay asap! If this is set up properly you should have enough "fees" to "play with" to use to create a very god deal for them -I recently had a T who owed me £1200 the situation had gone on for 8 months with dribs and drabs comming in from time to time. Finally i drew the line and hit him with a s21 and a bill for just under £3000 (with all the costs ) but with the option of just paying the £1200 and surrendering the property within 28 days - he of course, hit the roof roof he actually threatened me with court action- which i welcomed ( although as with 99.9% of threats of court action- amounted to nothing !) He "apparently" went to citizens advice and his solicitor - then came and paid me and vacated my property. THERE WAS AS USUAL NO NEED TO "ACTUALLY INVOLVE" THE DEBT COLLECTOR. If you want to start the s21 s8 prcedure immediately as a seperate issue you of course can ! Personally as i have mention before I have NEVER taken a tenant to court as i use the above system very successfully( i have upto 100 tenants at any one time !) - although I'm sure one day it will happen ! Landlords/Letting agents need to understand that they are running a business and that standard business models, practices, procedures and systems should be adopted and incorporated in to the running of your business. As any small business will confirm "getting the orders or business is easy- getting paid is a completely different matter". In short this problem should be addressed right at the beginning when a T is referenced - credit checked and assessed for risk - then ast should provide for this problem occurring - then a set procedure should be designed and followed - with both parties clear of what is going to happen. It astounds me to read of all these problems on here because people go into this blind - like lambs to the slaughter ! We all pay regular bills to organisations; gas, electric, CT , credit cards, water, phones, mobile phones, loans, car finance etc Now just have a look at all of the agreements you signed with this lot and how they all handle debt problems and look at their procedures. And lastly just have a little think on what your mortgage co will do if you start Pxxxxxx about with payments - do they pull their hair out and bang their head on the wall..................? NO they like any other business have procedures in place to deal with any given situation. DEBT MANAGEMENT IS A FUNDAMENTAL REQUIREMENT TO RUN ANY KIND OF BUSINESS - IT IS TIME TO WAKE AND SMELL THE COFFEE! I am also amazed at the amount ( the vast majority ) of Letting Agents who do not have procedures or the infastructure in place to deal many problems like this and simply pass it back to the Landlord saying "they havent paid " These are the very same guys who question using debt collectors! It is for these reasons that i dont and never will use and agent, until i find one who is capable of living up to their inflated claims and has the experience to do the job properly.( i believe there are one or two out there but i cant find them !) Guess i will be self managing for the forseeable future then .................!!!!!!!!!!!!!!! Using a DEBT COLLECTOR (or more accurately "the threat of using a debt collector") Unprofessional ? Immoral ? Unethical ? I think not ! All comments welcome - Is there a better way ? Simon Link to comment Share on other sites More sharing options...
GPEL Posted June 10, 2007 Report Share Posted June 10, 2007 Is there a better way? Take out a rent guarantee & legal expenses policy - cheap at twice the price and saves the phaf. Keep a tab of other smaller bills and recover from the deposit. Don't let debts build to ridiculous level until doing something about it. Agents aren't personal finance or debt recovery managers, they're property managers whose service doesn't include debt recovery, which they are unqualified to do and not usually included in their terms of business. Pass it to the professionals via insurances, RGLE policies, DCs if you must or online yourself using PCOL or small claim submission. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted June 10, 2007 Author Report Share Posted June 10, 2007 Hi Gpel Agreed ! But rent gaurantee schemes only usually cover 2 months - okay so if T is 2 mths in arrears then you are going to try to get rid of them but this can take some time and what does one do to recover the period not covered by Gar Scheme ? Also agree LL should react immediately - and not let it build up - but we all know the stories - waiting for cheques- drop it in next week -wages havent cleared -waiting for my loan too come thru - then bounced cheques and about a million plausible excuses - part payments here and there etc - It is very easy for even the best of us to have a fairly small problem escalate into a very big problem pretty quickly ... do you not agree ? Also appreciate that LA's are not DC's but the basic building blocks to instigate proper debt control should be put in place and by the LA, in order to facilitate solving what is a very real problem, and the fact is that the are not!!!!!!!! Simon Link to comment Share on other sites More sharing options...
GPEL Posted June 10, 2007 Report Share Posted June 10, 2007 Simon, debts only grow if you let them and accept excuses, which is why correspondence should be deadline driven. A good RGLE product pays the rent until the tenant is evicted and covers legal costs of doing so; some policies go wider than that. DCs IMHO only serve a limited threat-based purpose that is easily to replicate yourself with a well worded letter or two. What do DCs do when the debt isn't paid inspite of their procedures - they recommend legal action is instigated through the court and charge you extra it, no different from an agent really. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted June 10, 2007 Author Report Share Posted June 10, 2007 Gpel exactly what i am saying ! but with some sustance ie increased costs as motivational deterrent - but in order to do this you need it built into your "paperwork" . Most of these problems can be avoided as we are saying - I have only ever actually used a DC twice and one of those occasions was nothing to do with prop or Tenant ! So on round one i clear up all of my problems (with the threat of DC) On round two (involvement of DC) they have a huge success percentage and wipe out the vast majority of problems Then statistically a minute amount would have to go to court But clearly people are looking for advice - and court is mentioned on here as the most popular answer - which is rarely the case, in mine never .....YET!!! People need to make better provision and try steps 1 & 2 or as you have rightly pointed out Get RGLE ins- LL who use LA need some sort of direction if not action from LA and to just collect rent if T is willing to pay then shirk all other sits does not justify ther fee in my opinion! Newbie LL use them with blind faith ! Simon Link to comment Share on other sites More sharing options...
GPEL Posted June 10, 2007 Report Share Posted June 10, 2007 Agreed. As with everything else, due diligence in selection of agent should include questioning them about their rent recovery procedures and what happens should that fail. Is it the agents fault or the landlord enquiring about their service if someone expects an after-service that an agent has never offered. To me it's an unreasonable expectation nevertheless good agents will provide guidance. Agents cannot sign-off court forms on behalf of landords. If they could I'm sure they'd offer the service. I've heard of more solicitors and landlords screwing up the paperwork than agents, especially when it comes to serving notices. Not defending agents, but they aren't all from the same mold. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted June 10, 2007 Author Report Share Posted June 10, 2007 Think we may have to let Trenners out of this one ! "due diligence" is definately the key phrase with this whole "industry" !(including advice given on this forum LOLOL!!) Simon Link to comment Share on other sites More sharing options...
J4L Posted June 11, 2007 Report Share Posted June 11, 2007 Well I welcome this post simon, even though I seem to be taking your comments personally on a 'lot' of your posts slamming agents. I think you'll find that I haven't really disagreed much with what you've said but what seems to be the hasty way you suggest the involvement of DC's, and that's it. Of course there needs to be a system in place for Letting Agents for the recovery of money and in our terms we DO have certain ways to approach these problems BEFORE involving the DC's. You suggest that there aren't too many GOOD letting agents around, I totally agree with this, and that's why we have set this business up because we see a huge gap in the market. Our problem is that there are too many Landlords with your attitude that Tar all Agents with the same brush and won't give them a chance. You ask for experience but you won't allow newcomers to the market to gain this. How do you expect them to learn and gain experience?? By letting others take the risk?? Of course you do. Take a punt mate, work WITH someone instead of against them and see if you can share your obvious wealth of experience to forge them into what an agent should be like. Then, and only then can you recommend an agent that you have had dealings with who you 'swear' by and others will follow suit. My experience as an agent, as I've said before, is massive. Admittedly it's not with lettings but with nursing and believe me if anyone tried to start up a Nursing agency they'd fall at the 1st hurdle. The red tape and legislation is MUCH MUCH more than setting up a lettings agency let me tell you. And in comparison, the 'risk' is much more than your £5 million portfolio when you are messing with people's lives in life or death situations. Let me give you an example if I may, you get admitted to hospital in an emergency and the nurse who is designated to look after you doesn't really have the experience to perform the duties that your complaint presents with. Let's say that she doesn't hold her hands up and admit this initially, makes a mistake and you die (god forbid). Your businesses, houses, income etc earn you well in excess of a million a year and your family sue ME for placing that nurse into an area that she was not comfortable or trained in. Trust me, the courts would hammer me, personally and professionally. Let's say you were 50 years old, earning a million a year and were probably going to retire at 65. Your family could say that you were in perfect health up until this inexperienced nurse looked after you and could sue me for what would have been 15 more working years in your life = £15 million. Now we had 500 nurses working for us so multiply the above scenario x 500 and you can see the pressure we were under EVERY day to do our jobs correctly. Now personally the suing thing and the money wouldn't be a worry too much for me but my conscience wouldn't be able to cope with just ONE death of a patient under the supervision of one of my staff. Suffice to say I learnt how to manage the situation from being a NEW agency with no experience to now being an established agent who has never been sued and never been responsible for the death of any patient. To summarise, yes we do have a business model, as you call it, for the recovery of money and yes I REALLY have got a track record for this. We turned over £7.5m in the last 4 years and never once did I have to employ a Debt Collector. Yes people owed me money, probably a LOT more than the odd months rent, but my systems were in place to manage these situations if and when they arose so please don't judge new Letting agents on their systems until you REALLY know about them. Any person entering into business has to styart somewhere, you obviously did. Remember the 1st house you bought? Did you know it all? Of course not, you relied on instinct and others' wise words to gain that experience and make your own route. I have employed in excess of 600 people in my years as an employer and quite a few have come to me with no experience at ALL looking to make a mark on an industry or learn the trade, a bit like an apprenticeship and I've welcomed people with open arms. The reason I do this is to share the knowledge and hopefully improve the service that is out there. Now if that person goes off and sets up on their own I ain't bothered because if I've taught them well enough and built a conscience into them then it just means that that particular sector of business is better off overall for it. You should try it. Infact I raise a challenge to you. You give me 5 of your properties to manage and I won't charge you a penny!! You, as a bonus, will get the headaches taken away for a while and I will gain experience in letting property. I will obviously sponge valuable tips and information from you but surely the whole industry will then benefit. Can you imagine coming on here in a few months time and recommending Just4Let as an agent? Knowing that you've done much to build this agency's reputation and knowledge base and been a major part of improving the efficiency of this market. Link to comment Share on other sites More sharing options...
GPEL Posted June 11, 2007 Report Share Posted June 11, 2007 I fear this is the wrong website to convert the disgruntled and dischuffed, whether justified or not... Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted June 11, 2007 Author Report Share Posted June 11, 2007 Hi J4L This is NOT a personal attack on you or anyone or any agent in particular! My apologies if you have taken it this way. It is an observation of what goes on, on a daily basis, and how the vast majority of LL and LA both experienced or not - do not seem to have any kind of plan or system to deal with what is really one of the most fundamental problems for any kind of, or sized business ! ie BAD DEBT To make this clear one more time - I do not advocate "putting debt collectors on the case immediately" - First negotiation, then the benifits of avoiding DC then finally after all possible disussion THEN DC and ultimately court ! but in order to do this you need the ast and system set up to run ! As stated previously i have avoided using DC except on 1 ocassion (for tenant) and 1 with other of my business and trust me - with the no of transactions i deal with -this is pretty astounding ! The general concenus on here seems to be "let them off" or "take them to court" neither of which i find acceptable as first line approach. The reason LL tar agents with the same brush is probably due to personal experience (in my opinion)! Yes to gain experience we must do the apprenticeship - but this raises the next point - to come back to nursing .. if you were to have brain surgery would you want the apprentice junior doctor or the consultant surgeon to do the job ? In this sit the consultant would almost certainly be overseeing the op so effectively would be doing it - Unfortunately in this industry there is no regulation etc hence reason for previous posts .. As far as anyone managing my portfolio i do use agents - a lot in fact ! for finding tenants -then i take over for ref, lease etc I deal with LA on a daily basis with my other businesses (furniture & Beds) and not they are not all incompetent by a long stretch - Thank you for the offer re 5 houses - but i must decline this generous offer - as for tips and info ... there is an abundance on here !! (including self righteous cynical loudmouths like me!) and you clearly have the nouse to agrue your point and question advice so keep it up - i certainly have respect for strong opinion as right or wrong as it may be - also as you will all ready be aware, i love a bit of banter ! The fact that there are a lot of "incompetents" out there is actually beneficial to me as it provides a good source of disgruntled tenants looking for a "professional treatment" !! Onwards ................ Simon Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted June 11, 2007 Author Report Share Posted June 11, 2007 Hi J4L This is NOT a personal attack on you or anyone or any agent in particular! My apologies if you have taken it this way. It is an observation of what goes on, on a daily basis, and how the vast majority of LL and LA both experienced or not - do not seem to have any kind of plan or system to deal with what is really one of the most fundamental problems for any kind of, or sized business ! ie BAD DEBT To make this clear one more time - I do not advocate "putting debt collectors on the case immediately" - First negotiation, then the benifits of avoiding DC then finally after all possible disussion THEN DC and ultimately court ! but in order to do this you need the ast and system set up to run ! As stated previously i have avoided using DC except on 1 ocassion (for tenant) and 1 with other of my business and trust me - with the no of transactions i deal with -this is pretty astounding ! The general concensus on here seems to be "let them off" or "take them to court" neither of which i find acceptable as first line approach. The reason LL tar agents with the same brush is probably due to personal experience (in my opinion)! Yes to gain experience we must do the apprenticeship - but this raises the next point - to come back to nursing .. if you were to have brain surgery would you want the apprentice junior doctor or the consultant surgeon to do the job ? In this sit the consultant would almost certainly be overseeing the op so effectively would be doing it - Unfortunately in this industry there is no regulation etc hence reason for previous posts .. As far as anyone managing my portfolio i do use agents - a lot in fact ! for finding tenants -then i take over for ref, lease etc I deal with LA on a daily basis with my other businesses (furniture & Beds) and not they are not all incompetent by a long stretch - Thank you for the offer re 5 houses - but i must decline this generous offer - as for tips and info ... there is an abundance on here !! (including self righteous cynical loudmouths like me!) and you clearly have the nouse to agrue your point and question advice so keep it up - i certainly have respect for strong opinion as right or wrong as it may be - also as you will all ready be aware, i love a bit of banter ! The fact that there are a lot of "incompetents" out there is actually beneficial to me as it provides a good source of disgruntled tenants looking for a "professional treatment" !! Onwards ................ Simon Link to comment Share on other sites More sharing options...
J4L Posted June 11, 2007 Report Share Posted June 11, 2007 New York. . . New York . . . . haha, you had to say it TWICE. I think you raise fair points Simon and I like you love the banter. It keeps us all on our toes. As for tips and advice I will continue to read forums, books and speak directly to people so that one day I can sit here and argue the toss FOR decent Landlords. As you said ONWARDS. . . . but I'll add (And UPWARDS) for Just4Let . . . . .watch this space Link to comment Share on other sites More sharing options...
GPEL Posted June 11, 2007 Report Share Posted June 11, 2007 Mischievous question for J4L. When you offer your cheap rates to landlords due you tell them it's because you have little experience or tell them you offer high professional standards and quality of service at discounted prices? Regardless of the price, landlords will expect you to know what you're doing and it'll cut little ice if their expense is a result of your inexperience. Though honest & open, from a business perspective, is it a good idea to highlight inexperience in this way. Link to comment Share on other sites More sharing options...
J4L Posted June 11, 2007 Report Share Posted June 11, 2007 GPEL This is an 'introductory' offer because we are a new company. It doesn't say we have a lot of, no, or little experience. That would be the landlords shout to ask. I was asked the other day and replied. I still got the contract, for 2 houses off the same Landlord. It's because of they way Some Letting Agents have acted in the past that we need to 'get Landlords on our side' This is really unfortunate and SHOULDN'T be the case. Locally we have at least 6 agents that have many years of experience but they're still s**t according to many of my friends that have used them in the past. Is a s**t service WITH experience any better than no experience and a s**t HOT service. I urge you to REALLY think about this before disregarding it. Trust me, i've been in business too long to understand the fundamental business ethic that most, if not ALL, the local agents don't come anywhere near achieving. Our service will be 2nd to none and I can personally guarantee this. Should a Landlord incur additional expense due to our 'inexperience' then I will personally fund this myself and move on. This is called 'learning the hard way' but I'm hoping that I can gleen much information from books and forums so i don't get into this predicament often, if at all. The ultimate decision lies with the Landlord looking for an agent. Once i've beaten back all the doubters, our business model will shine through. Then the s**t agents will either have to pull their socks up or close their doors, again that will be their decisions. What i'm saying is that overall i'm doing this for the INDUSTRY itself aswell as to build a business. Link to comment Share on other sites More sharing options...
GPEL Posted June 11, 2007 Report Share Posted June 11, 2007 Good luck and hope you pull it off. You're probably going to find that sometimes, no matter how well you do something, it's not seen that way... Link to comment Share on other sites More sharing options...
J4L Posted June 11, 2007 Report Share Posted June 11, 2007 We can only wait and see Link to comment Share on other sites More sharing options...
joseph90 Posted June 14, 2007 Report Share Posted June 14, 2007 Rodent - I like the way you manage your business. I would be very interested in seeing a copy of your AST for best practice purposes. Link to comment Share on other sites More sharing options...
Simon Dewsberry Posted June 14, 2007 Author Report Share Posted June 14, 2007 Hi Joe Firm but Fair! I look after all my tenants and usaully attend to problems within hours if not immediately ! We will be civil and flexible at all times and work with people on "problems" But if a Tenant wants to show me his middle finger, then i will snap it off..................! Simon Link to comment Share on other sites More sharing options...
J4L Posted June 14, 2007 Report Share Posted June 14, 2007 But if a Tenant wants to show me his middle finger, then i will snap it off..................! . . . . .. . or his DC will and sell it!!! haha Link to comment Share on other sites More sharing options...
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