Policy and Procedures for Rent Collection
Policy and Procedures for Rent Collection
BACKGROUND INFORMATION
Collection of tenant charges is important to the viability of a project. Without a high and timely tenant
rent collection rate, a project may not cash flow. As a result, the PHA must reduce costs which may
result in inadequate maintenance and the accelerated deterioration of the property.
This policy establishes the policy and procedures for the collection of rent and other charges; late charges
and return check assessment; and rent collection processing, reconciliation, and monitoring.
With regards to payment method, PHAs have flexibility to determine what payment method is acceptable.
However, PHAs are strongly urged to implement a “no cash” policy, unless state or local law requires the
PHA to accept cash as a form of payment. Note: Federal law does not require PHAs to accept cash as a
form of payment from a tenant. Cash is susceptible to fraud, can be lost, and is a security risk for the
office which is accepting cash.
This policy applies to all programs of the PHA for which tenant charges are collected. This rent
collection policy should be read in conjunction with the following policies: 1) write-off and 2) tenant
accounts receivable (TAR) processing.
This document provides three (3) samples of a PHA rent collection policy and procedures.
Sample 1 – PHAs with manual system (small PHA). This sample provides a rent collection
policy for PHAs that utilize a manual system for collecting rent.
Sample 2 – PHAs with a software system and centralized rent collection. This sample
provides a rent collection policy for PHAs that utilize a software system for collecting rent and
centralized rent collection.
Sample 3 – PHAs with a software system and decentralized rent collection. This sample
provides a rent collection policy for PHAs that utilize a software system and has a decentralized
rent collection system (i.e., tenant rent is collected at multiple properties).
PHAs can simply cut and paste any or all samples into their policy and procedures documents and modify
them as needed.
ITEMS FOR CONSIDERATION
The following provides items that the PHA needs to consider when developing the policy and procedures
for rent collection and the major assumptions that were used to develop the sample policies and
procedures.
1. Assumption – The PHA does not accept cash as payment for rent. (All PHAs)
2. Assumption – The project / program manager will take the deposit to the bank. (PHA with a
decentralized rent collection system)
3. Assumption – The software system has a past due report. (PHA with a software system)
1
Policy and Procedures for Rent Collection
SAMPLE 1 – PHAs WITH A MANUAL SYSTEM (SMALL PHA)
RENT COLLECTION POLICY
This policy establishes the policy and procedures for the collection of rent and other charges; late charges
and return check assessment; and rent collection processing, reconciliation, and monitoring. Collection of
tenant charges is important to the viability of a project. Without a high and timely tenant rent collection
rate, a project may not have sufficient cash flow. As a result, the PHA must reduce costs which may
result in adequate maintenance and the accelerated deterioration of the property.
It is the policy of the PHA to actively pursue timely and full collection of tenant charges due. Collection
of tenant charges will be used to support the projects/program from which the charge occurred. Cash may
not be accepted as a form of payment.
This policy applies to all programs of the PHA for which tenant charges are collected. This rent
collection policy should be read in conjunction with the following policies: 1) write-off and 2) tenant
accounts receivable (TAR) processing.
RENT COLLECTION PROCEDURES
The following rent collection procedures are described below.
Collection of rent and other tenant charges,
Late payment of rent and return check charges,
Rent collection processing, and
Rent collection monitoring and reconciliation.
Collection of Rent and Other Tenant Charges
The following procedures will be used for the collection of rent and other tenant charges.
The initial payment (rent and security deposit) that the tenant makes when moving into the unit is
to be made at the main office.
Subsequent rent payments, and other charges if applicable, are due and payable in advance,
without notice, on the first day of the month.
All payments, including the initial payment, must be made by check, money order, or certified
cashier check. No cash payments will be accepted. A sign will be listed for public viewing at
each site where a payment can be made indicating “No Cash Payments Will Be Accepted”.
Late Payment of Rent and Return Check Charges
Late charges and return check charges will be processed based on the procedures outlined below. The
PHA’s Admissions and Occupancy Plan (ACOP) and Administrative Plan provides the amount that will
be assessed for late payment of rent and checks returned because of insufficient funds.
A late charge of $XX will be assessed to the tenant for rent and other payments not received by
the close of business on the 10th day of the month.
2
Policy and Procedures for Rent Collection
If the tenant fails to make payment for rent or other charges by the 10th of the month, a 14-day
notice to vacate will be issued to the tenant with a 14-day notice for failure to pay rent,
demanding that payment be made in full or the surrender of the premises at the expiration of the
14 days.
A charge will be assessed for checks returned for insufficient funds and the tenant will not be
allowed to pay by personal check for a period of 6 months. A second occurrence of the tenant
submitting an invalid check will result in the tenant being denied the privilege of paying by
personal check for 1 year; a third invalid check will deny a tenant the privilege of paying by
check indefinitely. If the check is not honored by the close of business on the 10th day of the
month, the rent will be considered unpaid and the tenant is subject to late charge fees.
Rent Collection Processing
Rent and other tenant payments will be processed based on the following procedures.
A payment receipt should be utilized. The payment recipient book should be pre-numbered, in
duplicate, and should not be completed prior to the receipt of payment from the tenant.
A staff person will write a payment receipt for the tenant rent when payment is provided by the
tenant. If a lock box is used, the lock box will be accessed each day and payment receipts will be
completed by the staff person and mailed to the tenant.
The payment receipts should be recorded on the accounts receivable spreadsheet the same day
they are received.
A daily deposit slip should be completed listing all payment receipts and amounts.
The beginning and ending payment receipt number should be listed on the deposit slip.
Payment receipts should be deposited with no skips in receipt numbers.
Deposits should be separated between tenant receivable collections and other revenues
such as laundry money or vendor refunds.
The amount of the daily deposit slip should match the amount entered on the accounts
receivable spreadsheet for the same day.
The PHA will deposit all payments received on the same business day. That is, the PHA will not
delay depositing a check at the request of a tenant, until funds are available.
Rent Collection Reconciliation and Monitoring
The PHA will follow the rent collection reconciliation and monitoring procedures outlined below.
During the monthly reconciliation process, total cash receipts as reported in the accounts
receivable spreadsheet will be compared to the actual deposits for accuracy and completeness. If
the amounts do not match, the accountant or Executive Director will research the discrepancies
and reconcile the two amounts.
As part of the monitoring process, the Executive Director will review outstanding balances to
ensure that all rents have been posted and that outstanding balances have been addressed.
Monthly, the Executive Director will review the bank statements to confirm that deposits match
the total cash received as reported in the general ledger and that deposits are made timely.
3
Policy and Procedures for Rent Collection
SAMPLE 2 – PHAs WITH A SOFTWARE SYSTEM AND CENTRALIZED
RENT COLLECTION
RENT COLLECTION POLICY
This policy establishes the policy and procedures for the collection of rent and other charges; late charges
and return check assessment; and rent collection processing, reconciliation, and monitoring. Collection of
tenant charges is important to the viability of a project. Without a high and timely tenant rent collection
rate, a project may not cash flow. As a result, the PHA must reduce costs which may result in adequate
maintenance and the accelerated deterioration of the property.
It is the policy of the PHA to actively pursue timely and full collection of tenant charges due. Collection
of tenant charges will be used to support the projects/program from which the charge occurred. Cash may
not be accepted as a form of payment.
This policy applies to all programs of the PHA for which tenant charges are collected. This rent
collection policy should be read in conjunction with the following policies: 1) write-off and 2) tenant
accounts receivable (TAR) processing.
RENT COLLECTION PROCEDURES
The following rent collection procedures are described below.
Collection of rent and other tenant charges,
Late payment of rent and return check charges,
Rent collection processing, and
Rent collection monitoring and reconciliation.
Collection of Rent and Other Tenant Charges
The following procedures will be used for the collection of rent and other tenant charges.
The initial payment (rent and security deposit) that the tenant makes when moving into the unit is
to be made at the main office.
Subsequent rent payments, and other charges if applicable, are due and payable in advance,
without notice, on the first day of the month.
All payments, including the initial payment, must be made by check, money order, or certified
cashier check. No cash payments will be accepted. A sign will be listed for public viewing at
each site where a payment can be made indicating “No Cash Payments Will Be Accepted”.
Late Payment of Rent and Return Check Charges
Late charges and return check charges will be processed based on the procedures outlined below. The
PHA’s Admissions and Occupancy Plan (ACOP) and Administrative Plan provides the amount that will
be assessed for late payment of rent and checks returned because of insufficient funds.
A late charge of $XX will be assessed to the tenant for rent and other payments not received by
the close of business on the 10th day of the month.
4
Policy and Procedures for Rent Collection
If the tenant fails to make payment for rent or other charges by the 10th of the month, a 14-day
notice to vacate will be issued to the tenant with a 14-day notice for failure to pay rent,
demanding that payment be made in full or the surrender of the premises at the expiration of the
14 days.
A charge will be assessed for checks returned for insufficient funds and the tenant will not be
allowed to pay by personal check for a period of 6 months. A second occurrence of the tenant
submitting an invalid check will result in the tenant being denied the privilege of paying by
personal check for 1 year; a third invalid check will deny a tenant the privilege of paying by
check indefinitely. If the check is not honored by the close of business on the 10th day of the
month, the rent will be considered unpaid and the tenant is subject to late charge fees.
Rent Collection Processing
Rent and other tenant payments will be processed based on the following procedures.
A payment receipt should be utilized. The payment recipient book should be pre-numbered, in
duplicate, and should not be completed prior to the receipt of payment from the tenant.
A staff person will write a payment receipt for the tenant rent when payment is provided by the
tenant. If a lock box is used, the lock box will be accessed each day and payment receipts will be
completed by the staff person and mailed to the tenant.
The payment receipts should be entered into the software system the same day they are received.
A daily deposit slip should be completed listing all payment receipts and amounts.
The beginning and ending payment receipt number should be listed on the deposit slip.
Payment receipts should be deposited with no skips in receipt numbers.
Deposits should be separated between tenant receivable collections and other revenues
such as laundry money or vendor refunds.
The amount of the daily deposit slip should match the amount entered into the software
system for the day.
A daily rent collection report will be printed from the software system that matches the
bank deposit and will be attached to the deposit slip.
A copy of all deposits made will be submitted to the finance department daily so that the finance
department can confirm the accuracy and timeliness of deposits.
The PHA will deposit all payments received on the same business day. That is, the PHA will not
delay depositing a check at the request of a tenant, until funds are available.
Rent Collection Reconciliation and Monitoring
The PHA will follow the rent collection reconciliation and monitoring procedures outlined below.
During the monthly reconciliation process, total cash receipts as reported in the software system
will be compared to the actual deposits for accuracy and completeness. If the amounts do not
match, the accountant / finance department / Executive Director will research the discrepancies
and reconcile the two amounts.
As part of the monitoring process, a past due report should be printed from the software system
and the program director will review outstanding balances to ensure that all rents have been
posted and that outstanding balances have been addressed.
5
Policy and Procedures for Rent Collection
Monthly, the Executive Director / program director will review the bank statements to confirm
that deposits match the total cash received as reported in the general ledger and that deposits are
made timely.
6
Policy and Procedures for Rent Collection
SAMPLE 3 – PHAs WITH A SOFTWARE SYSTEM AND DECENTRALIZED
RENT COLLECTION
RENT COLLECTION POLICY
This policy establishes the policy and procedures for the collection of rent and other charges; late charges
and return check assessment; and rent collection processing, reconciliation, and monitoring. Collection of
tenant charges is important to the viability of a project. Without a high and timely tenant rent collection
rate, a project may not cash flow. As a result, the PHA must reduce costs which may result in adequate
maintenance and the accelerated deterioration of the property.
It is the policy of the PHA to actively pursue timely and full collection of tenant charges due. Collection
of tenant charges will be used to support the projects/program from which the charge occurred. Cash may
not be accepted as a form of payment.
This policy applies to all programs of the PHA for which tenant charges are collected. This rent
collection policy should be read in conjunction with the following policies: 1) write-off and 2) tenant
accounts receivable (TAR) processing.
RENT COLLECTION PROCEDURES
The following rent collection procedures are described below.
Collection of rent and other tenant charges,
Late payment of rent and return check charges,
Rent collection processing, and
Rent collection monitoring and reconciliation.
Collection of Rent and Other Tenant Charges
The following procedures will be used for the collection of rent and other tenant charges.
The initial payment (rent and security deposit) that the tenant makes when moving into the unit is
to be made at the main office.
Subsequent rent payments, and other charges if applicable, are due and payable in advance,
without notice, on the first day of the month.
All payments, including the initial payment, must be made by check, money order, or certified
cashier check. No cash payments will be accepted. A sign will be listed for public viewing at
each site where a payment can be made indicating “No Cash Payments Will Be Accepted”.
Late Payment of Rent and Return Check Charges
Late charges and return check charges will be processed based on the procedures outlined below. The
PHA’s Admissions and Occupancy Plan (ACOP) and Administrative Plan provides the amount that will
be assessed for late payment of rent and checks returned because of insufficient funds.
A late charge of $XX will be assessed to the tenant for rent and other payments not received by
the close of business on the 10th day of the month.
7
Policy and Procedures for Rent Collection
If the tenant fails to make payment for rent or other charges by the 10th of the month, a 14-day
notice to vacate will be issued to the tenant with a 14-day notice for failure to pay rent,
demanding that payment be made in full or the surrender of the premises at the expiration of the
14 days.
A charge will be assessed for checks returned for insufficient funds and the tenant will not be
allowed to pay by personal check for a period of 6 months. A second occurrence of the tenant
submitting an invalid check will result in the tenant being denied the privilege of paying by
personal check for 1 year; a third invalid check will deny a tenant the privilege of paying by
check indefinitely. If the check is not honored by the close of business on the 10th day of the
month, the rent will be considered unpaid and the tenant is subject to late charge fees.
Rent Collection Processing
Rent and other tenant payments will be processed based on the following procedures.
Rents and other tenant payments will be received at the project rather than the central office.
A payment receipt should be utilized. The payment recipient book should be pre-numbered, in
duplicate, and should not be completed prior to the receipt of payment from the tenant.
A staff person will write a payment receipt for the tenant rent when payment is provided by the
tenant. If a lock box is used, the lock box will be accessed each day and payment receipts will be
completed by the staff person and mailed to the tenant.
The payment receipts should be entered into the software system the same day they are received.
It is the responsibility of the project manager to take the deposit to the bank each day.
A daily deposit slip should be completed listing all payment receipts and amounts.
The beginning and ending payment receipt number should be listed on the deposit slip.
Payment receipts should be deposited with no skips in receipt numbers.
Deposits should be separated between tenant receivable collections and other revenues
such as laundry money or vendor refunds.
The amount of the daily deposit slip should match the amount entered into the software
system for the day.
A daily rent collection report will be printed from the software system that matches the
bank deposit and will be attached to the deposit slip.
A copy of all deposits made at the property will be submitted to the finance department daily so
that the finance department can confirm the accuracy and timeliness of deposits.
The PHA will deposit all payments received on the same business day. That is, the PHA will not
delay depositing a check at the request of a tenant, until funds are available.
Rent Collection Reconciliation and Monitoring
The PHA will follow the rent collection reconciliation and monitoring procedures outlined below.
During the monthly reconciliation process, total cash receipts as reported in the software system
will be compared to the actual deposits for accuracy and completeness. If the amounts do not
match, the staff accountant will research the discrepancies and reconcile the two amounts.
The Finance Director shall review the bank reconciliation to determine whether deposits from the
project managers are made timely.
8
Policy and Procedures for Rent Collection
As part of the monitoring process, a past due report should be printed from the software system
and the project manager / program director will review outstanding balances to ensure that all
rents have been posted and that outstanding balances have been addressed.
Monthly, the Finance Director will review the bank statements to confirm that deposits match the
total cash received as reported in the general ledger and that deposits are made timely.