The Role Of Landlord-Tenant Relationships In Arrears Management

The pandemic has put pressure on renters which, combined with emergency legislation, has placed a renewed emphasis on arrears management. Income recovery teams are more stretched than ever before. But, apart from employing new and innovative rent collection strategies, how can you ensure that your social housing association is receiving payments on time?

The way in which you engage and build relationships with your tenants can have a huge impact on whether your rent collection and arrears management is successful or not. Positive landlord-tenant relationships can also help to future-proof your organisation. Here, we draw upon behavioural science literature and Voicescape’s latest behavioural insights research to explain exactly why…

Improving compliance

Research [LINK TO GUIDE: Arrears Arrangements – How To Approach Them In A Post-COVID World] has suggested that when individuals feel they have been treated fairly, they are more likely to accept decisions made by organisations, show greater compliance and behave in a more cooperative manner. [LINK: Importance of a landlord-tenant relationship]

So, if we relate this back to landlord rent collection, positive relationships can increase the likelihood of tenants sticking to an agreement, maintaining their property and paying on time.

Maintaining arrangements

Paramount to the success of a rent arrears arrangement is how well it is created in the first place – and this includes having the ability to monitor them. Engaging with tenants and creating a relationship not only provides them with a chance to inform you of any payment difficulties but allows your team to check in themselves.

Your team can know the extent of a tenant’s arrears, when they last paid and which challenges they may have run into. Not only does this provide you with ideas for streamlining rent collections but allows you to intervene earlier and learn from the results.

 Mitigating risks

As mentioned above, being able to monitor and adjust arrangements is crucial to their success. After all, an optimal arrangement might not continue to be optimal if situations change. When tenants are able to inform their landlord – without repercussions – of a change, and update their arrangement, it engages tenants in an active process before problems get out of hand.

This reinforces fairness and reciprocity [LINK: How To Create A Positive Landlord-Tenant Relationship] which play crucial roles in creating a positive relationship between the landlord and tenant.

Management of rent arrears

Landlord-tenant relationships are changing, and those who fail to embrace this will be left behind. There is more of a focus on support, especially when it comes to enforcement actions. Providers have an opportunity to test this out – fostering a relational approach with tenants that builds a positive landlord-tenant relationship.

This is not to suggest organisations should stop all enforcement action. Fundamentally, it is about tailoring engagement to specific customers/situations – and there will be times when enforcement actions represent the most effective techniques. However, a relational engagement approach should enhance the effectiveness of these actions.

Our Behavioural Insights Lead, Chris Walker, has explored this topic in further detail in our latest guide: ‘Arrears Arrangements: How To Approach Them In A Post-COVID World’. You can download it here. [LINK TO GUIDE: Arrears Arrangements – How To Approach Them In A Post-COVID World].  Don’t forget to join in the conversation on Twitter and LinkedIn.