Frequently Asked Questions about On Time Rent Limited

Please find below some questions and answers that may help with your query.

Please be aware that the answers below are generic and are not specific to any particular scheme member, therefore you should also refer to your terms and conditions to obtain a definitive answer.

1. What is On Time Rent Factoring?

   Factoring in commercial terms is a payment of invoices issued by a supplier to their customer, by the 'factor'. The 'factor' is responsible for collecting the money from the customer. This is a very widely used process in commerce. On Time Rent factoring is exactly the same process, the rent due from the tenant is paid by On Time to the Landlord’s agent within seven days of the rent due date. The agent deducts his charges from the OTR fee, and any other disbursements, and pays the landlord on the rent day – On Time. OTR collect the rent from the tenant by Direct Debit.

2. As an agent how do I arrange to offer the scheme?

   You make an application to join the scheme by completing an application form, and submitting it to OTR head office. OTR will take up references and make a credit check. If everything is in order then the agent is invited to complete an agreement with OTR, sign a Direct Debit mandate for the payment of fees, and return it to OTR. OTR will then supply all the marketing material, documents and a user manual to allow you to start. Help with adding information to your web site is freely available.

3. How do I set up a property and/or landlord on the scheme?

   When the landlord has decided to use the scheme you MUST ask him/her to sign the OTR Landlords agreement, you will be authorised to sign the agreement on behalf of OTR. This agreement is held by you the agent. It will only be required by OTR if legal process is required against the tenant.

4. How do I set up a tenant on OTR?

   When a tenant is found for the property they must be made aware that OTR will be collecting the rent on your behalf, and that the rent will be collected by Direct Debit. On signing the tenancy agreement – which will have a clause relating to the OTR scheme – the usual references must be taken up. Approved reference providers are on the web site. A clear credit check and original letter on firms letter head from their employer are also acceptable.

5. The tenant passes the reference checks what now?

   The tenant completes the OTR Direct Debit, and the details form for the tenancy. Contact details are essential especially the Mobile Phone number. These are then sent to the Freepost address of OTR. This information has to be sent within 5 working days of the commencement of the tenancy.

6. What money does the agent need to take at the commencement?

   The agent should take the usual funds advance rent deposit etc from the tenant. The agent must retain the OTR fee for month one, which will be collected after the first advance rent payment is made for month two.

7. When do OTR make the first rent payment?

   The first rent payment is made within seven days of the rent due day for month two of the tenancy. The intention is that the rent should always be sent to the agent seven days before the rent due date, but if a weekend, or bank holiday intervene then whilst the money may have been sent in time the receipt by the agent may be delayed by the banking system. Such delays are outside of OTR’s control.

8. When the agent receives the rent what then?

   The agent should make arrangements to deduct their fee, the OTR fee, including the month one fee, and any other authorised deductions, and pay the rent to the landlord on the day it is due – On Time. This is the essence of the scheme and is an obligation on the agent to do this.

9. What happens at the end of the fixed term?

   You are free to extend the tenancy in any way you wish. It is essential that reference is made to OTR before finalising any extension arrangement because if the tenant has a poor payment record OTR may not be able to extend the On Time scheme. However if the tenant has been a good payer and the Landlord wishes to continue with OTR then the scheme can be continued indefinitely. Changes to the tenancy term need to be notified to OTR on the appropriate form as soon as the changes have occurred.

10. What happens if the tenant goes into arrears?

    Importantly OTR continue to pay the rent to the Landlords Agent for up to six months or vacant possession, whichever is the sooner. The debt recovery team at OTR start the process of collectig the rent. It is our wish to collect the rent even late, rather than resort to legal process. OTR will keep the agent notified of issues regarding payment as appropriate.

11. If legal action is required when will the landlords agent be made aware?

    The landlords agent will be kept informed of the payments or lack of them by OTR. If the tenant fails to pay for a whole month, then OTR will request the full details of the tenancy from the Agent which will include the landlords OTR agency agreement, the tenancy agreement and any notices that may have been served. Legal action will commence as soon as this documentation is received, which has to be with OTR no later than six weeks from the first time the tenant went into arrears.

12. What happens if the tenant says they have withheld rent because of the landlords failure to repair?

    OTR will immediately investigate this with the agent and will request full details of the issue. If the landlord has refused or failed to carry out a repair which is statutory duty, then OTR will suspend rent payments until the matter is resolved. If the repair extends beyond one month then OTR have the right to cancel the contract on this tenancy.

13. If legal process is in train will the agent be involved?

    Yes it is possible the agent may be required to attend at court, but OTR’s solicitors will advise if the agent and or the landlord are required to attend court.

14. If the tenant leaves the property what happens to the rent then?

    As soon as possession of the property is available by virtue of the court order or the tenant vacating then OTR stop paying the rent. The agent may be asked to inspect the property periodically to establish if the tenant is still in possession.

15. If arrears have been left by the tenant will OTR want the deposit?

    No, only if there is a balance after dilapidations have been paid for. The balance of the deposit should then be made available to OTR to defray the arrears of the tenant.

16. If after the tenant has left there are arrears what do OTR do?

    OTR will have secured a court order for the arrears and legal fees if appropriate. At some point in the future OTR will seek to collect the outstanding arrears from the tenant. The full details of the tenant will have been provided to OTR with the documents required under Q11.

17. Is there a limit to the rent that the OTR scheme will factor?

    Yes the minimum rent is £400 per calendar month, the maximum is £5000 per calendar month.

18. What would happen if OTR went out of business?

    OTR have the backing of National Westminster Bank for the factoring of rent, and carry insurance underwritten by AXA to cover exceptional legal costs and rent. However should OTR cease to trade, as tenants pay their rent by Direct Debit, the landlords agent should advise the tenants to pay the rent direct to them, and the tenants should cancel the Direct debit. If rent has been paid to OTR and not forwarded to the agent the tenant is still responsible for the payment of the rent, and they can make a claim under the Direct Debit guarantee, direct to their bank, and reclaim the unpaid rent.