How should a landlord measure and report rental arrears?
Arrears is rent and charges that are due but unpaid. Report the total amount, the number of tenants in arrears, and an ageing by days overdue. Arrears as a percentage of rent billed in the period shows the scale relative to the portfolio.
Formula in words: arrears balance divided by total amount billed for the period, multiplied by 100.
It matters because overdue rent is cash that is already earned but not received, and the risk of non-payment rises with age.
Commonly misread:
- Netting tenant deposits or credit balances against arrears without showing both.
- Mixing rent with utility recoveries and penalties.
- Reporting only a total, which hides one large tenant behind many small ones.
Track by tenant, property and age bucket, and set alerts when a tenant crosses an agreed overdue threshold.
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