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The eagerly awaited feature gives rental agencies using PayProp even greater control over timely tenant payments and will help earn landlord confidence by protecting their cash flow – failing which daily interest can automatically be levied for the landlord’s account.
Having been entrusted with processing agencies’ client funds securely, quickly and reliably since 2004, PayProp takes this custodial duty very seriously.
The PayProp platform already enables agents to place only the most reliable tenants through its integrated Tenant Assessment Report and credit checks; sends automated payment reminders to late payers; and automates arrears recovery right up to legal proceedings, if need be – backed by a permanent auditable transaction log that can be used as evidence in court.
Adding automated interest on arrears billing to this formidable set of protections will give landlords the confidence of another line of defence against defaults.
Jan Davel, Managing Director of PayProp SA and Group Head of Regulatory Compliance and Risk, cautions that a rental agency can only charge interest on rent arrears if this is provided for in the lease agreement. He emphasises that it is only payable to the landlord: an agency may not take this interest as their own fee.
Under PayProp’s End User Licence Agreement, the feature may at any rate not be used for debt collection in terms of the Debt Collectors Act (114 of 1998), even if an agency is registered as a debt collector.
The amount of interest must further be reasonable and not contravene any applicable legislation.
The new interest on arrears billing feature automatically calculates and applies interest on overdue rent payments, based on flexible rules set by the agent.
PayProp users can choose a billing start date and set the percentage interest to charge daily, after which billing will automatically happen on the total outstanding amount at month-end, along with the new due rent.
By streamlining the payment recovery process, property businesses can redirect valuable resources towards core operations and growth initiatives, while incentivising prompt payment and improving landlord and agency commission cash flow.
"At PayProp, we constantly strive to make property managers’ work easier by automating as many of their payment administration tasks as possible,” says Bruce Jackson, PayProp’s Chief Technology Officer. “We are confident that the automated interest on arrears billing feature will save you time and allow you to focus on your business’s real priorities, rather than on time-consuming payment administration."
Sarah Fourie, PayProp’s Head of Client Services in South Africa, is excited about what the new feature represents: “With each new feature, PayProp continues to empower the residential rental industry and add value through innovative solutions that empower businesses.”
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