The day when you are handing over the keys should be the most enjoyable day of the whole process. All the work should be taken care of. Inventories are being completed, funds are in and contracts are signed. Everyone should be happy, right?
You should be able to relax and just hand over the keys; but stay on point. The rental process is not over yet and a mistake at this stage could be monumental and one that needs to be avoided at all costs.
Handing over the keys is a simple enough end to the whole rental process, but there is of course best practice involved. Never, regardless of the situation hand over the keys to your property until the move in funds have cleared into your account or your broker’s account. It really is that simple, heed this advice do not commence a move in until you are sure you have been paid.
In this article, we are going to discuss collecting the money. How to get the funds and when you should be taking them. Plus, we will be looking at the process of releasing the keys to your new tenants. So, let’s begin.
Collecting the Funds before Handing Over the Keys
Collecting the funds is often a landlord’s most favourite part of the process. It generally tends to come after references have been completed and contracts have been signed, and of course tends to signify the home straight of what can be a laborious process. But it is not a time to let your guard down. There are a few things you must remember when dealing with collecting the funds.
When to Collect Funds
Firstly, when. My advice would be to have the tenants transfer the funds as soon as the contract has been signed. This gives them plenty of time to organise the transfer and ensures that they can see a clear process as the deal moves along.
Always avoid allowing your tenants to delay payment and transfer on the day of move in. This can frequently be an issue. If you are using a broker who holds the funds between the tenants payment and you receiving the funds there should be no reason for the tenants to delay the process.
Be mindful that most tenants will be planning to move for some time and therefore should have access to the funds they need prior to move in and shouldn’t be complaining to you that they need more time to pay. Remember they agreed the amount due with you and when it needed to be paid by so it should not be a surprise.
When it comes to things to look out for at the point of payment, random delays or odd queries are a bit of a smoking gun. Put frankly, if the tenants are being this painful with their first payment that is not a great sign. Agree a clear payment timeframe with your tenants that ends with them being given the keys on the day of move in.
How to Collect funds
Never, under any circumstances should you consider handing over the keys prior to funds landing in your account. This leads me nicely onto how to collect the funds. Avoid cheques, they can bounce and can be fraudulent, so should never be taken as cleared funds.
I know of landlords that have taken cheques and allowed tenants to enter their property only to have to spend thousands of dollars to remove them without earning any rent at all. These “Professional Squatters” will offer to pay with bad cheques in the hope that you allow them to move into the property and then squat until you have them evicted. A lengthy and costly process.
Also, be weary of delayed bank transfers. Whilst bank transfers would be an absolute mandate for me in terms of accepting funds, these can also be manipulated. I have seen people claim funds have been sent, even showing remittance slips only to then cancel the transfer in the hope that you will take the remittance slip as cleared funds and release the keys.
Do not be surprised as more and more people have begun to look at these sorts of tricks and are taking advantage of unsuspecting brokers and landlords. My advice would always be to take the payments via an online bank transfer that should be completed in a couple of hours and is traceable and simple enough for anyone to complete.
Collecting funds can be a surprisingly stressful part of the rental process, particularly if tenants pay late and the process runs close to the wire, but stick to your guns and only release the keys once the funds have cleared.
Handing Over the Keys
Once the concerns with any outstanding funds have been put to bed you should feel comfortable enough to release the keys to your new tenants. You or your broker should be able to do this.
Check the contract on last time, ensure the funds are in and have a final check with both parties to make sure everyone is happy. Once those keys are released there is no going back.
When to Release Keys
Keys should be released on or after the day of move in (some tenants will choose not to move straight into a property and may collect the keys a few days after the contract officially begins).
I would plan to agree upon a time upfront with your tenants and aim to stick to that. Most tenants will want to collect their keys as early on move in day as possible, but be mindful that if funds have not yet cleared you should not be releasing keys to anybody.
Discuss a suitable time with your broker and either deliver the keys the day before for them to release or arrange to be at the property yourself to release the keys to the tenants
As we have commented on at length in this article, ensure you have contracts signed and funds cleared before you release keys and inform anybody else involved in the process that regardless of what may happen no keys are to be handed over until you give the final go ahead.
Make a point of being the one who calls to release the keys or release them yourself to ensure that everything is correct and in order prior to giving out the keys.
How to Release Keys
This sounds very simple and it is. But there are a number of ways that you can release the keys to the tenants and it does pay to have a plan in advance. It is worth mentioning at this stage that before the “Big Day” it is a good idea to check that the keys in your possession work and that you have enough keys to give to the tenants. That would be my first piece of advice. Check this in the run up to releasing the keys to avoid any frantic hunts for locksmiths on the day of your tenant’s move in.
As discussed above, you do have a few options and how you proceed is basically up to you. Some landlords will want a very hands-on relationship with their tenants and will want to meet them on the day of move in, discuss the inventory, talk through the property and really make sure they settle into the place well.
Others will aim to be as detached from the process as possible and will give the keys to the broker to release. Staying as removed from the process as possible makes decisions easier for landlords in the long run as they have no real connection with the tenants.
You may also wish to leave the keys with a neighbour or have your property manager meet the tenants, show them the inventory and walk them through the property to ensure they understand how the heating, etc. works.
All of these are good options and are ways you may wish to release your keys. As long as you have completed your checklist, had the contract signed, carried out satisfactory references and have cleared funds in your account how you release the keys is completely up to you.
Giving out the keys at the wrong time or to the wrong person can really blow your tenancy. Never assume that what you are being told is 100% fact and make sure you see things clearly in writing and in a nominated bank account before moving forward and releasing keys.
This process should be smooth and 90% of the time it is. Be on the lookout for odd behaviour from your new tenants; delayed payments, insisting on cheque payments, sending strange people to collect the keys. These are all things that when taken at face value seem fairly innocent, but they could all also be signs that something isn’t quite right.
The best course of action would be to agree on a timescale, a way of transferring the funds and handing over the keys and sticking to that plan. This means that all parties are on the same page and that the move in will be smooth. Plan how the day will play out and stick to it. Doing so will make move in day a pleasant and stress free day for all involved.