managing delinquency & evictions overview...

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1CA.Tzadik.1.30.2107

Ø Purpose:Theobjectiveofthispresentationistoprovidethecommunityteamswithageneralunderstandingofdelinquencyprocesses.Specifically,communityteamsshouldleavewith:

• Athoroughoverviewofhowtoeffectivelymanageyourcommunitiesdelinquencyandthetimelineassociatedwithdelinquencies;simplystated“CollectthatMoney”

• AnunderstandingofhowcriticalYARDIposting,noticesandARreportingandmeasurementis;

• Theevictionandcollectionprocess;.

Ø Topics

• EffectiveARManagement

• DelinquencyTimeline

• YARDIPosting

• Notices

• ARMeasurement

PhysicalOccupancy

Renewals

GrossRentalRate

Delinquency/EvictionRate

Turns

Repairs&Maintenance

ResidentSatisfaction

NetCashFlow

ManagingDelinquency&Evictions

Overview

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Ø DELINQUENCYGOAL<5%initial<2%longterm

• ItisimperativethatDaily/weeklymeetingsareheldwiththePropertyTeamtosetweeklyspecific,measurableandattainablegoals.YoumustdiscussthisduringtheDailyHuddleandinDepthduringtheWeeklyDeepDive.

• Delinquencymustbeadailyfocus.

Ø KEYFACTORSTOSUCCESS

• Consistency(Billing,Timing,Notices)

• Reporting(Specific,GoalFocused)

• Practices(Residentcommunicationandeducation)

• Audit(Ledgermanagement,Baddebtcontrol,Evictionstatus)

DelinquencyKPI&KeyFactorsToSuccess


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Ø Thefollowingare6stepsofeffectiveA/Rmanagement:

• Ensuringtheproperrecordingofrevenue(charges)inaResident’sgeneralledgeraccount;

• PostingpaymentstoaResident’sledgeraccount;

• Evaluatingandmonitoringdelinquency;ReviewHighRiskDelinquencytabdaily

• Securingthepaymentofalldelinquencies;call,knock,email;repeat

• Pursuingevictionasappropriate;and

• WritingoffunpaidaccountsandforwardingtoCollectionswhennecessary.

EffectiveARManagement


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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DelinquencyTimeline


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


TIMELINE ACTIONIFRENTPAYMENTNOTRECEVEID(ORPAYMENT PLANNOTAGREEDTOINWRITING)

1ST OFTHEMONTH-DUEDATE RENTISDUE- Banditsignongrounds- RENTisDue

5th dayofthemonth Banditsign- LastDaytoPayRENTbeforeLateFees

6THoftheMonth RENTISLATE;LATE FEESAREPOSTED

7th oftheMonth 1)Notlaterthanthe7th -3DayNoticetoPayorQuitarepostedonthedoor2)CopiesmustbemaintainedintheresidentfileinYardi

5TH – 19TH OFTHEMONTH 1) Dailyphonecallstoresident,knockondoors,postremindersondoors.Alternatetimesofcallsanddoorknock- i.e.morning,afternoonandevening.

2) Smallbalancelettersentandfollowupphonecallsanddoorknockingtocollect

25th oftheMonth Unlesstheresidenthasanapproved, writtenPromisetoPay,thefileispreparedtosendtotheevictionattorney

Throughthelastdayof themonth 1)Dailyphonecallstoresident,knockondoors,postremindersondoors.Alternatetimesofcallsanddoorknock- i.e.morning,afternoonandevening; followuponPromisetoPay,smallbalancesandutilitychargesunpaid2)Walkall unitswithhighbalancesandtheunitswheretheresidenthasbeensenttoeviction;”encouragefriendlyeviction”.

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DelinquencyTimeline


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


1st ofthemonth– RentisDue!Banditsignsup

6th ofthemonth– RentisLateandlatefeesarechargedinYARDI

6th-19th ofthemonth– DailyCalls;Knockondoors;email;textandNoticetoPayRentorQuitareserved

5th-9th – DailycallsandBalanceOwedNoticesforallbalancesunder$150

24th – lastdayapaymentarrangementcanbepaid

25th – sendnon-paymentresidentstotheattorneys

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Ø PostingpaymentstoaResident’sledgeraccount

• Tzadik currentlyacceptsavarietyofpaymentmethods:Paperremittance:personalcheckorcertifiedfunds(moneyorder/cashierscheck);andElectronicremittance:recurringACHandone-timeACH/debitcard/creditcard.

Ø Electronicremittance• Electronicremittanceismuchmoreefficientforthecompany(andthepropertiesAR

collectionefforts),especiallyrecurringACH,andthusshouldbeactivelyrecommendedbyPropertyManagementstafftoanyResidentnotusingit.

Ø Paperremittance• MustadheretotheintakeprocessasspecifiedbyTzadik Accounting,includingthe

acceptanceofpaymentfornomorethanthecurrentmonth’srentdue.

• Paymentsbestreceivedby(andshouldberecommendedto)Residentswith:theYARDIpropertycode;and,fullresidentnameandaddress.

YARDIPosting


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø LateFees

• ThelatefeethatisoutlinedintheResident’sLeaseAgreementmustbechargedforeveryResident,withonlyonewaiverallowedpercalendaryear.

• LatefeewaiversmustbenotatedasamemointheCompany’smanagementdatabaseanddocumentedappropriately.

• Rentthatisreceivedshouldbeappliedtolatefees,NSFfeesandalloutstandingchargesontheledgerbeforethepastduerent.*verifywithlocalcounsel.

Notices


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø NSFFees• EnsurethatthecheckhasbeenprocessedasNSFintheledgerbytheaccountingdepartment.

• ChargetheNSFFeeand,iftherentDueDatehaspassed,theLateFeeintheledger.

• ContacttheResidentasacourtesywithintwenty-four(24)hourstoinformthemoftheNSFFee(andLateFee,asapplicable).

• Aftertwo(2)NSFsoccurinYARDI duringtheResident’stenancy,theResidentisautomaticallyputon“cashequivalent”statusfortheremainderoftheirresidencyinYARDI.

Notices


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø ContactwithDelinquentResidents

• Verbalcontactismuchmoreeffectivethananoticeinthemailoronthedoor.• Phonecall,knockondoor;repeat

• KeepcurrentphonenumbersandemailaddressesaccessibleinYARDI.• Contactplaceofemployment• Cellphone

• BesuretoletResidentsknowthatlatepaymentsadverselyaffecttheircreditandrentalhistory,andthatlatefeescancompoundunpaidbalances.

• InsistonrentpaymentNOW(“NoOtherWay”)

• Undernocircumstancesareverbalpaymentarrangementsacceptable.

PartialPaymentsarenotacceptedwithoutPromisetoPay

Notices


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø PromiseToPaymentArrangements

• These agreements must be documented, never verbal.

• These agreements are intended only for balances greater than $150.00. Anyportion that cannot be paid prior to the end of the month should not bearranged.

• A Resident may have only three (3) payment arrangements during any twelve(12) month period.

• Notices to Pay Rent or Quit should always be sent in conjunction with (not in lieuof) payment arrangements

• Resident accounts with payment arrangements that should not be sent toeviction attorneys until the expiration or default of the arrangements expiration(not necessarily the notice date(s).

Notices


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø EvictionProcess

• EvictionsMUSTbefiledbythe25th ofthemonth

• YARDImustbeupdatedaccurately

• PropertystaffMUSTfollow-upwiththeattorneyearlyintheprocesstoconfirmreceiptandconfirmaccuracyofthenotices

• Propertystaffisresponsibleforactivelymonitoringtheoccupancyoftheunitunderevictionnolessthanonceeveryseven(7)calendardays.ThesevacancychecksmaybeperformedbytheCRM,ARM,LRM,RTMORMT.ALWAYScheckoccupancybeforecourtdate,sheriffservingwritanddayofeviction;cancelifresidenthasvacatedsowedonotincuradditionalcosts

• Toensurequalitycontroloftheevictionprocess,theRegionalRetentionManagerandtheCommunityRetentionManagershouldmeetweeklytoreviewthefollowing:• Statusupdateoneveryunitcurrentlyineviction• Postmortemofissues/outliersofcompletedevictions• Ensurethatallfilesaresenttothecollectioncompanyforeveryresidentwha hasvacatedandowesTzadik money

ARManagement


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø IftheResidentwantstocure(payoutof)theeviction

• Allpastrentmustbepaidinfull.

• Allpastfeesincludingbutnotlimitedto:Latefees,Utilityfeesandlegalfeesmustbepaidinfull,incertifiedfunds,directlytotheattorneypriortothecourtdate.

• PaymentplansmustbeapprovedbytheRegionalRetentionManager.

• UponapprovalfromtheRegionalRetentionManagerandreceiptofthefunds,theevictionattorneyneedstobeinstructedtostoptheevictionatthatpoint.

ARManagement


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø WriteOffs

• Toensuretheaccurateaccountingofunpaidaccounts’value,thepolicymustbefollowedinaconsistentandtimelymannerbyeachCRM.

• Allwrite-offsaretobeapprovedbytheRegionalRetentionManagerorCRO,andprocessedbyaCRM.

• WriteoffallamountsowedbyaPastresidentforwardedtothecollectionagencytopursuepastduepayments.(thatis,afteradepositreconciliationincludingpreviouslyCurrent,NoticeandEvictionresidents).

• Writeoffallamountsowedattheendofeachmonthwiththemonthendcloseout.

ARManagement


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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HowtoCalculateDelinquencyRates


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


Ø DelinquencyPercentage=(Totalunpaidbalancesfor0-30,31-60,60-90,90day+)/currentmonthrent

*Donotsubtractprepayments

TotalEOMAR=$5500Dividedby

RevenuefortheMonth$125,000

Equal=4.4%

Tzadik Metricfor2017=<5%

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HowtoSetCollectionGoals


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


Ø Utilizeagoaltrackingsheetandreviewweeklytoresetgoals.Celebratesuccessandmaintaindailyfocus!

DelinquencyDollars

0-30 ___________ 61-90 _________

31-60 ___________ 90+ _________

GOAL ACTUAL SPOKETORESIDENTNumberofDaysIamgoingtomakecalls __________ __________ __________________

NUMBEROFDAYSIAMGOINGTOKNOCKONDOORS __________ __________ __________________

TOTALCALLSPERDAY __________ __________ __________________

CONTACTSMADE __________ __________ __________________

Paymentspostedtoledger GOAL ACTUAL__________ __________

Name/Title: _________________________________

CRMReviewandDate:__________________________

COMMENTS/NOTES:

WeSucceedTogether!

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ARreportsavailableinYARDIandAPS–Ø TheARreportwillbesenttoyoueachMondayautomatically

Ø SaveReportØ CreateaColumnonthereport- “NOTES”

Ø Samplenotesareprovidedonpage17ofthisdocument

Ø Asyoumakeyourcontactsdaily,addnotestoyourreportto“KeepEachOtherInformed”

Ø SendacopyofyourreportwithyournotestoyourRegionalRetentionManagereveryFriday

ARReporting


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


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Ø Comment#1

Ø Comment#2

ARReporting


DelinquencyTimeline

YARDIPosting

Notices

ARMeasurement


Ø Comment#3

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POP QUIZ! – Managing Delinquency & Evictions

1. What is the KPI for Delinquency?

2. How do I calculate my delinquency?

3. Name 2 reports that assist you in managing your delinquency.

4. When do I send notice to pay rent or quit?

5. When do the late fees get charged??

6. Are partial payments accepted?

7. Should I encourage someone to pay rent in the office or online?

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CollectionProcess- DRAFT Phase One BRYANT AND BRYANT

Within 24 hours of placing an account, the following will happen:

• The first of four letters is sent to the debtor via the US Mail.

• Your case will be placed into the workload of one of our on staff

collectors.

• Our collector will attempt to contact the debtor and produce a resolution to the matter.

Expect our collector to place daily phone calls the first 14 to 21 days in

an attempt to contact the debtor.

If all attempts to reach a conclusion to the account fail, we go to Phase Two where we immediately forward the case to one of our affiliated

attorneys located within the debtor’s jurisdiction.

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CollectionProcess- DRAFT Phase Two

Upon our office sending your case to a local attorney within our

network, you can expect the following.

• The receiving attorney will immediately draft the first of several letters to the debtor on his law firm letterhead demanding payment

of the debt owed to you.

• The receiving attorney or one of his staff members will immediately start attempting to contact the debtor via the phone, in addition to

the series of letters.

If all attempts to reach a conclusion to the account continue to fail, we will send you a letter explaining the issues surrounding the case and

what we recommend for the next and final step.

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CollectionProcess- DRAFT Phase Three

Our recommendation will be one of two things.

• If after a thorough investigation of the facts surrounding the case and of the debtor’s assets, we determine the possibility of recovery is not

likely we will recommend closure of the case.

You will owe nothing to our firm or our affiliated attorney

for these results.

• If our recommendation is litigation you will have a decision to make. If you decide not to proceed with legal action we will drop the case

and you will owe our firm or our affiliated attorney nothing.

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Delinquency Handouts and Resources

Ø Resources:

Ø Your Regional Retention Manager

• YARDI – Financial Aged Receivables

• YARDI – AR Aging and Delinquency Detail-Resident

• APS- High Risk Delinquency Tab

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Questions?

Questions?WemakelastingRelationships

WekeepeachotherInformed

WemakeitHappen

WeSucceedTogether

WeareFinanciallyResponsible

WeneverstopGrowing

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Tzadik BestPracticesforCollections

Therearetheold“TriedandTrueStandards:1. CallonthePhone2. Email3. Knockonthedoor

OryoucantrythesecreativeideastoaddtoyourTzadik toolbox:

WesucceedTogether!

Createanddistributenoticestargetedtospecificsituations(Yellownotice,Rednotice,Waterutility).

-After-hoursCollectionsParty(staylateandcatchpeoplewhentheycomehome)

-Keepmaintenanceupdatedofbalancessothattheycanaskresidentstopay

-Provideanupdated3-DayNoticeifapartialpaymentismade

-Createa“PTP– PromisetoPay”Binderwithsignedpaymentarrangements

-AddPTPduedatestotheCalendarinYardi

-Printoutdelinquencydailyfocusingonhighriskresidentsfirst

-FluorescentRENTISLATEnotices

MOREIDEAS!PLEASESHARE!TogetherWeSucceed,especiallywhenWeKeepEachOtherInformed!

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