In light of the current economic situation in South Africa, agents are struggling more and more with tenants that pay late, or not at all. The most recent PayProp Residential Rental Index reported that the average South African tenant spends roughly a third of his pre-tax earnings on servicing debt, while still juggling up to eight store accounts and three credit facilities.
“What is more concerning is that the average tenant is using approximately 69% of the credit available to them, resulting in limited means to absorb any further financial shocks that might occur,” says Liebenberg. The reality is that estate agents are requiring increasing assistance to secure regular monthly rental payments.
In response to this, PayProp has partnered with Koegelenberg Attorneys for the launch of an integrated Letter of Demand Service. This means that at the click of a button a PayProp user can select a tenant that is in arrears and request that a Letter of Demand is sent via Koegelenberg Attorneys. PayProp will immediately send the tenant an SMS and an e-mail informing them that such a letter is in the process of being generated (a copy of the letter will be sent to the tenant and attached to the tenant’s profile for easy reference). This is followed by an e-mailed copy as well as a registered mail letter – with the relevant notice periods and any changes in the tenant’s outstanding balance being automatically tracked on the PayProp platform.
Liebenberg says that the cost of the service is minimal at R75 (incl. vat) and there are no additional hidden costs. To save time for the agent, an invoice for the cost is automatically raised against the tenant’s account and a payment instruction for the same amount is loaded in favour of the estate agency – so that the costs are easily recouped.
“The system is proven – in a pilot roll-out 74% of tenants in arrears paid up within in 14 days. It’s that simple,” concludes Liebenberg.