Owning a rental property can provide a steady source of income, but when a tenant leaves owing rent, that income can quickly turn into a financial loss. One or two months of unpaid rent can represent thousands of dollars, and the landlord may also be dealing with cleaning, repairs, utilities or other expenses related to the tenancy.
Many landlords attempt to recover the money themselves. They send emails, make phone calls and give the former tenant additional time to pay. Sometimes that works. But what happens when the tenant stops responding or repeatedly promises to pay without actually doing so?
This is where working with a professional collection agency can become valuable.
Unpaid Rent Doesn’t Disappear When a Tenant Moves Out
A common misconception is that once a tenant has moved out, there is little a landlord can do about outstanding rent.
Moving out does not automatically erase a legitimate debt. If a former tenant owes money and the landlord has appropriate documentation supporting the amount claimed, the account may potentially be pursued for collection, subject to applicable laws and requirements.
The important thing for landlords is to maintain good records.
Lease agreements, rent ledgers, invoices, correspondence, payment histories and other documentation can become important when attempting to establish what is owed.
Why Collecting Rent Yourself Can Become Difficult
At first, contacting the tenant directly may be the simplest solution.
The landlord sends a reminder. The tenant says, “I’ll pay you Friday.”
Friday arrives and nothing happens.
Another message is sent. This time the tenant says they need another two weeks. Eventually, telephone calls go unanswered and emails receive no response.
This cycle can continue for months.
Landlords have properties to manage. Spending hours repeatedly contacting a former tenant can become frustrating and time-consuming, particularly when those efforts aren’t producing payment.
A collection agency allows the landlord to transfer much of that collection work to professionals.
What Does a Collection Agency Do With Unpaid Rent?
When an eligible rental debt is placed with Canadian Express Collection Agency (CECA), the collection process moves from informal landlord follow-up to professional debt recovery.
Depending on the circumstances of the account and applicable requirements, collection efforts can involve contacting the debtor, communicating the outstanding balance, seeking payment and discussing arrangements where appropriate.
That change alone can sometimes make a difference.
A former tenant may ignore repeated messages from a landlord because they believe there will be no further action. Communication from a collection agency makes it clear that the outstanding account has progressed beyond ordinary rent reminders.
Documentation Can Make a Big Difference
Before submitting an account for collection, landlords should organize the records associated with the tenancy.
Useful documentation may include the signed lease or rental agreement, the tenant’s contact information, a ledger showing rent charged and payments received, correspondence concerning the outstanding balance, and relevant orders or judgments if applicable.
Accurate records help establish how the balance was calculated and can make the collection process more efficient.
Landlords should also avoid inflating an account with unsupported charges. The amount submitted should be based on money the landlord is legally entitled to pursue.
What If You Can’t Find the Former Tenant?
This is another common problem.
A tenant moves out and suddenly the landlord no longer knows where the person lives. Telephone numbers change, emails go unanswered and mail may be returned.
That does not necessarily mean the landlord should simply write off the debt.
At CECA, debtor information search services may be available for accounts where additional information is required. The circumstances of each account should be reviewed individually to determine the appropriate next step.
Don’t Wait Forever to Deal With Rental Arrears
Time matters when dealing with outstanding accounts.
The longer an unpaid balance sits in a filing cabinet, spreadsheet or property management system without action, the more circumstances can change. People relocate, telephone numbers change, financial situations deteriorate and records can become harder to locate.
If your normal attempts to obtain payment have failed, repeatedly sending the same reminder may not change the outcome.
At some point, the better business decision may be to place the account with professionals.
CECA Helps Ontario Landlords Pursue Outstanding Rental Debts
Canadian Express Collection Agency works with eligible collection accounts in Ontario, including rental arrears and judgment-related matters.
Our role is straightforward: help clients pursue money legitimately owed to them through a professional collection process.
For landlords, that means spending less time chasing former tenants and more time managing their properties.
If a former tenant owes you money, gather your lease, payment records, contact information and supporting documents. The sooner you properly assess the outstanding account, the sooner you can decide whether professional collection is the appropriate next step.
Have unpaid rent that you have been unable to recover?
Contact Canadian Express Collection Agency (CECA) to discuss placing an eligible rental account for collection.