As COVID-19 gripped the world, significant restrictions were put in place which limited landlord’s ability to collect rent on their properties. But these restrictions can’t last forever. So what options are available in terms of long-term rent recovery, and how can the power of software be leveraged to make this process more successful and cost effective?
The Current Situation
The restrictions imposed by the government during the COVID-19 crisis on landlords' methods for recovery of rent include:
1. Forfeiture of commercial leases – Section 82 Coronavirus Act 2020 prevents any forfeiture between 26 March to 30 June 2020 or such later date as may be specified in regulations. Those sums remain due.
2. 90 day stay of all possession proceedings – Practice Direction 51Z states all possession proceedings for 90 days from 26 March.
3. Commercial Rent Arrears Recovery (CRAR) – The Taking Control of Goods and Certification of Enforcement Agents (Amendment) (Coronavirus) Regulations 2020 now temporarily prevents landlords from using CRAR unless an amount of at least 90 days’ rent is due. It was previously seven days or more. This applies until 30 June 2020.
Rent Recovery Software
Once the above restrictions are lifted, there will undoubtedly be high levels of rent arrears to reclaim. The application of rent recovery software is the most simple, productive and effective method to adopt. The rent recovery process is streamlined as the process becomes automated. Faster processes ensure faster recovery, and reduced labour costs lead to an increase in overall cash-flow for the company. The application of rent recovery software is also the most hassle-free approach to reclaiming the rent payments you’re owed.
Artificial Intelligence and Automation
The future of rent recovery post COVID-19 will be built on the pillars of artificial intelligence and automation. Those who invest in these critical systems will be able to emerge from a post COVID world with an efficient and purposeful rent recovery process. Rent recovery software harnesses the power of AI and machine learning, which gives its human users vital insights into who is likely to pay their rent arrears, when this payment will arrive, and what the best circumstances are to ensure that rent can be recovered. In addition, the daily operational tasks of rent recovery, which previously are labour-intensive, become automated. Staff become freed up to work just where they’re needed, costs are minimised and all correspondence and processes will meet the government’s ever-changing compliance demands.
In 2020 the collections industry will undoubtedly become more highly regulated. Fines for non-compliance are likely to increase, but so will the amount of debt your organisation needs to recover. Lateral’s vast experience, coupled with our certified ISO 27001 rating, ensures you will be always be acting within the required regulatory frameworks. If rent recovery forms a significant part of your workload, we can help you. To learn more about our industry-leading system, get in touch.