Arrears

Arrears list shows the tenants that are behind in schedule of their rent payments and some details about their payment details.

The list of arrears contains fields:

1. Tenant – The name of a tenant.
2. Property – The property address the tenant is renting.
3. Month Rent – The amount of monthly payment by the tenant as defined by the lease agreement.
4. Paid To – The date from when the tenant owes money for rent.
5. Last Paid – The date of the last rent receipt transaction.
6. Days – The number of days that is unpaid by the tenant. It is taken from:
   
   Days = Number of days between the Paid To Date and Current/Due Date
   
7. Rent Arrears -The amount of money the tenant owes. It’s calculated as:
   
   Rent Arrears($): Full month periods * Month Rent + Remaining number of days from last full rent period till today * Daily Rate
   
   Daily Rate($): Month Rent * 12(month) / 365(days)

Calculation of Arrears

If the tenant is overdue for the Monthly Rent payment or has only partially covered it, he/she appears in the Arrears list. In the picture below you can see the Last Date when the tenant has made a payment and info about how many days he is behind in payment.

As can be seen from the picture, to the current date(22/07/2020) the tenant owes $771.29, which translates to being 15 days behind schedule of her rent payments.

Below is the sample tenant that we use for our calculation:

The Paid to date can also be found in the Tenant’s profile. From the very first time, it counts as one day before the Inaugural lease date and then refreshes monthly according to the rental receipts made by the tenant. For this tenant, the Inaugural lease date is 08/02/2016, so his first Paid to date was 07/02/2016. This date changed to 07/07/2020 over time as a consequence of her rent receipts.

Details of the calculation:

From the last Paid To date(07/07/2020) to the current date(22/07/2020) has been 15 days. it’s shown at the field Days in the Arrears list.

To find the Rent Arrears we need to use this formula:

Rent Arrears($): Full month periods * Month Rent + Remaining number of days from last full rent period till today * Daily Rate,

where Daily Rate = Month Rent * 12(month) / 365(days) = $1564*12/365 = $51.42/day

To do the Rent Arrears calculation we need to know how many full months have passed to the current date and multiply this amount to the Monthly Rent. Then, we need to add the number of remaining unpaid days multiplied to the Daily Rate. However, in case we don’t have any of the full months passed, so the formula will look like:

Rent Arrears($): Remaining number of days from last full rent period till today * Daily Rate= 15*$.51.42 = $771.29

CASE 1: Underpayment

Tenant pays some payment, for example, $100.

The Arrears list will be renewed according to the received payments. It should be clear that the tenant’s partial payment won’t totally cover the amount she owes and she stays in the Arrears list. However, the tenant’s amount of arrears and the number of days in arrears will change.

Changes in the Rent Arrears payment:

Rent Arrears= $771.29 – $100 = $ 661.29

Changes in the number of days arrears:

Days= Rent Arrears / Daily Rate = $661.29 / $51.41 = 13 days

CASE 2: Overpayment

Tenant makes some payment, which is more than her arrears, for example, $3000.

First of all, we need to distribute the incoming payment to cover the tenant’s dues.

If the amount of receipted payment is more than the amount of Rent Arrears, the tenant is removed from the Arrears list and his overpayment stores as Credits for being processed.

We can notice that tenant made enough payment by the Paid To field in the tenant profile. As you know, the Paid To date changes per rental cycle, and when tenant paid full monthly payment the date will be moved for a month forward. In our case, to calculate the period we need to subtract from the receipted payment the amount of full monthly rent, as $3000 – $1564 = $1436. As we can see, the $3000 receipted payment is enough to cover only one monthly rent. It means that tenant’s Paid To date will be shifted to one month forward(from 07/07/2020 to 07/08/2020), and $1436 will go to Credits.

The picture below shows this situation when the tenant removed herself from the Arrears list (current date: 22/07/2020)