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Tips to recover maintenance dues from defaulters

Possibly the biggest problem all residential and commercial buildings face is collection of monthly maintenance bill from different residents (both owners and tenants). A recent research conducted by TheHouseMonk has indicated that only 50% of residents make their payments on-time without any reminder – that’s a startling low number and a cause of concern for most Owners Associations. Unless they can finish their monthly collections on time, supplier payments will get disrupted and may result in slow/temporary disconnection of services like housekeeping, security, water, etc.

TheHouseMonk spoke to members of many owners associations and has compiled the top 5 methods which help in recovering maintenance amounts from residents. If we have missed out on any, feel free to add them in the comments section!

(Check out https://thehousemonk.com/customer-owner-association#main to see how TheHouseMonk helps owners association with this problem)

1. Reminders through SMS/Email

Does your society RWA/Committee send reminders to residents to pay for the community/society services which they make use of ? If not then it is a good idea to start that now. Most residents delay making the payment as they are completely unaware that the invoice has been raised! Repeated reminders is very much essential to get residents to pay on time

2. Charge a late payment penalty fee

If a resident is making the payment beyond the due date, you can charge them a penalty. It would also be a good idea to link the penalty amount to how late the payment has been made. Ex. If you can have a rate of Rs. 50/day of delay. So someone who is paying 10 days late will have Rs. 500 as fine while someone who is paying after a 2 day delay will have Rs. 100 as fine. This encourages residents to make the payment on time.

3. Withdraw essential services to the defaulters apartment

This action can be followed by the committee withdrawing all kinds of community/society borne facilities like the power back up, water tanker, garbage disposal to the dwelling unit of the defaulter. The re-connection of these services should be made only after the full default amount has been paid with the interest/penalty on the default amount.

4. Public display of defaulters list

In all the notice boards in the building (as well as community WhatsApp Groups and social forums), display a list of all defaulters along with their unit number and the defaulters name. Seeing their name and details in an open forum as a defaulter encourages many residents to immediately make the payment

5. Legal notice

Despite multiple reminders, if the resident has still refused to make the payment for maintenance, then you can send a legal notice in consultation with an advocate to the defaulter. Given that this is an extreme step, it would be better to keep this as a last resort option.

Concluding thoughts

TheHouseMonk Building Management helps customers in collection of maintenance amounts from residents. The key features include

  • Digital invoicing and payment collection through an app. Residents can pay through credit/debit card, net banking, etc
  • Send Email/SMS reminders in an automated manner
  • Preparation of defaulters list and auto emailing to everyone as well as display on the residents app
  • Levying penalties and fines for defaulters

Check out https://thehousemonk.com/building-management for more information on this topic

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