Often one or more properties within a landlord's portfolio may have accumulated more charges than they have income available to pay them.
In this case, the agency has two choices, which ultimately depend on the landlord's individual preference.
- Treat each property individually, paying charges only where possible.
- Treat the portfolio as a whole and use funds from any property to pay any charges.
Allow payment of charges from any property
The first of these options is the default payment method discussed in the first section of the article on paying property charges.
The second option, allowing payment of charges from any of the landlord's properties with sufficient income, is discussed below.
When a property has insufficient income to cover its own charges, additional funds are allocated to it from other properties, richest first. In order words, the property with most spare income donates its funds before properties with less spare funds.
- From the landlord view, click the Pay Landlord button which will be shown if the landlord has rental income available to pay out on any of his properties.
- A list of properties will be shown, each with its respective income and charge balances.
- In the example in the screenshots below, the first image shows that one property has enough funds to pay its own charges, but the second has no funds.
- In this instance, a checkbox "Allow payment of charges from any property" is shown.
- Ticking this box consolidates the income and charges into a single line spanning all properties, and allows the overall charge value to be paid from the overall income balance. See the second screenshot. Each property will still pay its own charges as much as possible; it's only the deficits which are paid from other properties, richest first.
- complete the bank payment details in the form in the latter section of the page and click Pay Landlord.
The charges will now be marked as paid, the balance due to the office ledger by this property will reduce, and the funds available in the client account will reduce (probably to zero) to indicate that all charges have been paid and the remaining balance has been paid out to the landlord.
To complete the process, but not necessary at this stage, is to transfer management revenue from the client account to the office or business bank account where it may be used or withdrawn by the business.