1. Purpose
This Rental Arrears Management Policy Sets out the Procedures and standards for managing rent arrears within the RWC CSR Commercial Property Management portfolio.
The objectives are to:
- Protect landlords’ cashflow and asset value
- Maintain a professional, consistent and “zero tolerance” approach to late payments
- Ensure compliance with applicable legislation, trust accounting requirements and lease documention
- Promote early, clear communication with tenants, including in hardship situations.
Important: This policy is a management and process document only. It is not legal advise and does not replace the terms of any lease or applicable legislation. Where there are any inconsistency, the lease and the law prevail.
2. Scope
This policy applies to:
- All commercial and retail leases managed by RWC CSR; and
- (Where applicable) any residential tenancies managed by RWC CSR in Queensland, noting the specific requirements of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act).
It applies to all RWC CSR staff involved in:
- Property Management
- Trust Accounting
- Leasing and Asset Management
- Arrears Recovery and Enforcement
3. Guiding Principles
(a) Zero Tolerance
- Rent is due in full on or before the due date in accordance with the lease or tenancy agreement
- Any unpaid amount after the due date is treated as an arrears event and actioned promptly
(b) Daily Monitoring
- Arrears reports are reviewed every business day.
- No arrears item is left unreviewed or un-actioned
(c) Contact
- We follow our Standard Arrears Escalation Process outlined in Item 6 below.
(d) Formalisation of Breach
- If arrears are not rectified promptly, a formal breach/default notice is issued either on day 7 (seven) or as per the lease and relevant legislations
- For residential tenancies in QLD, this generally includes a Notice to Remedy Breach (Form 11), followed by a Notice to Leave (Form 12) where appropriate
(e) Strict Timelines
- Timeframes for remedial action and termination are strictly observed and diarised
- Legislative timeframes are never shortened; internal standards may be shorter, but never longer without owner consent.
(f) Communication and Hardship
- Tenants experiencing genuine financial hardship are encouraged to contact the property manager immediately.
- Any payment plans or concessions must be documented, time-bound and approved in accordance with this policy.
(g) Owner-Centric
- Landlords are kept informed of arrears, proposed actions and risks at all key stages
- Instructions from landlords (and their legal representatives) are sought for significant enforcement or concessions.
4. Roles and Responsibilities
Head of Commercial Property Management
- Oversees implementation and compliance with this policy
- Approves various standard arrears procedures in high-risk or complex matters
- Assist with negotiation of variations, rent relief or re-gearing where landlord approves
Property Managers / Assistant Property Managers
- Conduct daily monitoring of arrears
- Produce and circulate arrears reports
- Make initial and follow-up contact with tenants
- Issue arrears letters, default/breach notices and instructions to legal representatives in accordance with this policy
- Maintain accurate file notes and records
Trust Account / Accounts Staff
- Reconcile rent payments daily
- Confirm receipt and allocation of part payments and payment arrangements
5. Monitoring and Identification of Arrears
(a) Daily Arrears Report
- Generated each business day from the property management system
- Shows tenant, property, amount overdue, days in arrears and notes of prior contact
(b) Verification
- Trust account staff verify whether payments have cleared or are pending
- Property Managers confirm anomalies (bank delays, dishonours, misallocations)
(c) Classification of Arrears
- Early Arrears: 1-7 days overdue
- Standard Arrears: 8-14 days overdue
- Serious / Chronic Arrears: 15+ days overdue, or repeated arrears history
6. Standard Arrears Escalation Process
(Commercial, Industrial and Retail – Subject to lease terms and law)
Note: The specific time periods below are standard office practice. If a lease prescribes different timeframes for default or notices, the lease prevails and the process must be adjusted accordingly.)
6.1 Day – Rent Due
- Action – Rent is due in full as per the lease (e.g. on or before the 1st of each month in advance)
6.2 Day 2-6 – Early Arrears
- Trigger – Rent not received in full after the due date
- Action – Friendly SMS/Text message reminder sent on or around the 3rd day, stating they are overdue and request for immediate payment or explanation
- Action – Professional but firm email sent on or around the 5th with a statement of account and clear deadline
- Action – Property Team to reach out to tenant via a phone call on or around the 6th
6.3 Day 7 – 7 Day Formal Arrears Notice
- Trigger – Arrears still outstanding or partially outstanding by Day 7
- Action – Formal Arrears Notice emailed to tenant
6.4 Days 8-10 – Owner Notification
- Trigger – Arrears still outstanding after Formal Arrears Notice Sent
- Action – Property Team to provide Landlord with update + arrears summary and to seek instructions if landlord wishes to accelerate action
- Action – Second Formal Arrears Noticed emailed to tenant
6.5 Day 14 – Default / Breach Notice
- Trigger – Arrears remain unpaid or commitments not met by the reminder deadline
- Action – Default / Breach Notice sent
6.5 Day 15+
- Trigger – Arrears remain unpaid
- Action – If Solicitor has been engaged, all parties are to follow the instructions and timeline provided by the solicitor
- Action – If Solicitor has not been engaged, this is a discussion and strategy session with the Landlord and the Head of Commercial Property Management
7. Hardship and Payment Arrangements
(a) Identification of Hardship
- Tenants are encouraged to notify the Property Manager immediately if experiencing financial difficulty
(b) Assessment
- Property Manager gathers information (e.g. reason, duration, proposed plan)
- For commercial tenants, consider trading conditions, financial information, and landlord’s broader asset strategy.
(c) Approval Requirements
- No payment plan or rent concessions is to be agreed verbally or informally
- All arrangements must:
- Be approved by the Landlord (and, if required, by Head of Commercial Property Management)
- Be documented in writing (email, deed of variation or formal agreement)
- Specify amounts, dates and consequences of non-compliance
(d) Monitoring
- Payment plans are monitored as strictly as standard rent
- Immediate escalation occurs upon any missed instalment
8. Part Payments, Interest and Costs
- Part Payments
- Accepted only on the basis that they are without prejudice to the landlord’s rights and do not waive any breaches
- Priority allocation is typically to rent first, then outgoings, then other charges, unless the lease stipulates otherwise
- Interest on Late Payments
- Where provided in the lease, interest on overdue rent should be calculated and pursued in consultation with the Landlord
- Recovery of Costs
- Reasonable costs incurred in issuing notices, engaging solicitors or enforcing the lease may be recoverable if the lease allows
- Seek legal advice and landlord instructions before adding such costs to the tenant accounts
9. Reporting & Review
- Internal Arrears Report
- Produced at least weekly for management review, including tenant arrears, days outstanding, trends and actions taken
- Portfolio Review
- Periodic review (e.g. quarterly) of arrears trends to identify systemic issues, high-risk sectors or tenants
10. Documentation & Recordkeeping
- All notices (formal and informal), emails, files notes, SMS and phone call records must be:
- Accurate, contemporaneous and professional in tone.
- Stored in relevant property file and/or property management systems.
- Documentation must be kept in a manner that supports
- Litigation or tribunal proceedings
- Compliance audits
- Landlord reporting and instructions
11. Legislative Compliance
RWC CSR staff must:
- Act in accordance with:
- Relevant State and Territory property, leasing and tenancy legislation
- Trust account requirements and professional standards
- Consult with the Head of Commercial Property Management and/or Landlord’s solicitor where:
- There is uncertainty about notice requirements or enforcement steps
- Legislation changes or special COVID-type relief regimes or similar apply
12. Policy Review
This policy is to be reviewed at least annually, or earlier if:
- There are material legislative changes;
- There is a change in RWC CSR’s risk appetite or group standards; or
- Significant arrears events suggest that different processes are required.