Rental Payments - SO or DD

[apd]

Hi,

Is it possible to have tenants set up a direct debit rather than standing order for monthly rental payments, if you are unsure about their ability/willingness to pay every month

Thanks

 

[bacchus]

My understanding is that SO is a regular automated payment for fixed amount while SD is an automatic payment for variable amount.
But i think that neither of those will give you the guarantee of being paid, shall your tenant have unsufficient fund on his/her account, as both orders are executed only if the money is available on the account (at least that's my undertanding).

 

[rkeane]

Its their choice at the end of the day unless you create a new contract. However, I hate the idea of SO as often banks make mistakes and pay out even though you requested it to be stopped. If you feel your tenants wont pay, then dont let them in. If they ar enot paying then kick them out.

 

[elcato]

AFAIK only certain large companies are allowed setup direct debit e.g ESB, Eircom. The tenants have to set up the standing order. You can get them to fill out the details on the form and post it to their bank though. As was stated above, why take on tenants you fear may not have enough funds to pay the rent ?

 

[Perplexed]

Apd,
If you want to do DD's on your tenants it will cost you money to set it up. Normally only companies do this who have a lot of clients. Also if there are any defaults of payment it will cost you.

Can't understand why you would want to go this route unless you have a major property investment business. It still wouldn't guarantee payment - dd's can be stopped or cancelled as easily as s/o's

 

[bacchus]

If they ar enot paying then kick them out.

This is easier said than done.... You can not "kick" tenants out as they have rights. Procedures must be followed and that could take "a while".

As you said, best is not to let them in at the first place if there is a doubt regarding their ability to pay the rent. But, even if they have the money, you still have no guarantee that they will pay the rent.

 

[rkeane]

This is easier said than done.... You can not "kick" tenants out as they have rights. Procedures must be followed and that could take "a while".

As you said, best is not to let them in at the first place if there is a doubt regarding their ability to pay the rent. But, even if they have the money, you still have no guarantee that they will pay the rent.

but thats the nature of the business with no alternative. i have one experience where someone in our house was regularly late when paying rent. the lanlord took action by putting the rent up. we had to move.

 

[bacchus]

but thats the nature of the business with no alternative. i have one experience where someone in our house was regularly late when paying rent. the lanlord took action by putting the rent up. we had to move.

Are we not talking about the case tenants do not pay the rent? then, putting the rent up is irrelevant as they do not pay it anyway.....

 

[rkeane]

Are we not talking about the case tenants do not pay the rent? then, putting the rent up is irrelevant as they do not pay it anyway.....

but i wasnt suggesting that he do it. i simply dont agree with that approach. it just happened to me and got us out of the house.

 

[RainyDay]

DD is a 'pull' transaction. The landlord would have to 'pull' the money into their account. The tenant cannot set up a DD. He can only permit the landlord to take the money by DD.

SO is a push transaction which can be set up by the tenant.