When a resident owes money for excessive damages or skipped rent to SureDeposit, there are fewer discussions with the owner about a settlement amount, and reduced and quickened negotiations of payment arrangements.
Livingston, NJ (PRWEB) April 7, 2010
Residents who enroll in the SureDeposit (http://www.suredeposit.com) program are more likely to pay their lease-related debts in some balance segments than those who don’t, according to data analyzed by two leading collection firms serving the multi-housing industry. SureDeposit has been providing surety bonds as a security deposit alternative for the multifamily industry for the past ten years. Collections are an important component of its program because collections by SureDeposit accrue to the benefit of the property owner/ manager. In effect, improved collections by SureDeposit give property owners/managers another means to mitigate bad debt.
Specifically, according to ResidentCheck, a national provider of resident screening, pre-employment screening and multifamily collections, collections among debtors owing money to SureDeposit can be as much as 25% higher than for similar sets of debtors owing money to apartment owners or managers after having paid a traditional security deposit.
Jorge Baldor, president of ResidentCheck, attributes the improvement, in part, to the fact that former residents may feel a more stringent obligation to a third-party surety such as SureDeposit than to a landlord. “When a resident owes money for excessive damages or skipped rent to SureDeposit, there are fewer discussions with the owner about a settlement amount, and reduced and quickened negotiations of payment arrangements. The resident had already been made clearly aware of his obligations to the surety bond when he signed the lease. The bond seems to take much of the ‘wiggle room’ out of the debt equation.”
Joel Lackey, president of National Credit Systems, a national debt recovery agency for the multifamily industry, reports that for debtors owing between $600 and $900, the difference in recovery rates is evident. Lackey agrees that the terms of SureDeposit’s surety bond are straight forward and leave no room for interpretation, “With the bond, there is less confusion and fewer disputed claims which historically can be detrimental to the recovery rate. But another reason why collections are improved in this balance range may be that those residents that purchase a surety bond in the $600 to $900 range comprise a better resident profile overall than those that pay the traditional security deposit.”
Collection rates are also a function of other factors such as time and access to information.
SureDeposit Co-Founder and CFO Dan Rudd notes, “SureDeposit assumes the responsibility for collections on behalf of the owner or property manager. As a result, the time lapse between move-out and when we assign the file to pursue for collections is much reduced, with an eye toward improving the chances of having the outstanding debt collected from the former resident.
“In addition, collections agencies share their data with national credit bureaus and now, some resident screening firms. This exchange of information can impact collection rates in a positive way because it further exposes a renter’s failure to comply with their lease terms or pay any debt to SureDeposit, something that would impact their ability to lease another apartment,” Rudd added.
SureDeposit’s surety bond enhances a property owner’s risk management while dramatically lowering a resident’s move-in costs. With over one million units in more than 3,500 communities under agreement, SureDeposit is the nation’s leading provider of alternatives to refundable security deposits for the multifamily industry. Founded in 2000, SureDeposit is headquartered in Livingston, New Jersey, and has regional offices in California, Colorado, Florida, Georgia, Illinois, Maryland, Nevada, Rhode Island and Texas.
For more information, call 1-800-531-SURE (7873), or visit online at http://www.suredeposit.com.