eKourier Jan 2009

Well Managed Delinquents means Higher Income

Something that might be of interest. This was circulated by Glen Bayley, Qld Operations Manager: “Be aware of storers who are on the brink of becoming insolvent and who are about to be put into the hands of receivers, or who are advising that they have been put into the hands of Receivers. It is important to ensure a solid follow-up to minimise loses to centres as the Receiver will ensure funds to pay secured creditors but not us as unsecured creditors.” • A Storer who goes into bankruptcy will have a receiver appointed and you will receive a Notice of Appointment. • Ensure the name on the documentation matches the name on your records as being the Storer. For example, if the storage contract is with a company, papers relating to a bankrupt individual are not applicable so advise the party serving the Notice that the individual is not storing with you. Once Notice is received — Standard Self Storage Agreement • You should remove any overlock you have placed on the storage Space. Because you do not have priority over other creditors, you are unable to sell or deny access to the goods. By maintaining any overlock, you are suggesting that you have some control over the goods – this leads to complications with regards to the denying or granting of access to goods. Note that this does not mean removing the Storer’s lock. • We should immediately send a copy of the letter entitled ‘Letter to Receiver – Standard Self Storage Agreement’. (please liaise with me on this) • If the receiver elects to claim the contract, or does not respond within 28 days of receipt, they become personally liable for the storage fees. • You should direct fees which accrue from that time to the receiver. • The usual rights of the Facility Owner to demand payment flow once the agreement is signed in the receiver’s Cont next page... Identifying a Bankrupt Storer

Delinquent management has been an integral part of the day to day operations at Kennards. But it has assumed even more significance due to the fluidity of the current economic situation. Fears of job losses and an overall impact on day to day lives will affect how we receive payments from customers. As much as the process of handling delinquents is a frustrating experience, it must be done regularly to avoid the legal process at the end. The Debt Collection Best Practice is clearly outlined in KOSMO but often just that little extra effort can simplify things. This is where the Golden Rules of Debt Collection – outlined in KOSMO – comes in handy. 1. Don’t take collections personally 2. Be persistent 3. Always be polite, but FIRM 4. Document ALL of your contact with the delinquent customer in Notes in Storman 5. Stay on top of the collections 6. Delinquency problems start on the day of rental. Get vital information from the customer the day they move-in. 7. Be willing to negotiate. The best auction is the one you never have! 8. Reward customers that stay in contact with you! 9. Be willing to give in occasionally and discuss options! 10. Remember that being late is not being BAD! As evident, these rules ensure that, both the customer and us at Kennards enjoy a good storage experience. You have to remember that no one likes to be asked for money even though they owe us. Hence, it is important to ensure that the customer is comfortable when you talk to them. Once they know that they can discuss their issues, they are more likely to come up with answers. A cold attitude can lead to a customer shutting down. As rule number four says, “always be polite but firm”. We don’t always like to hear of someone’s problems over the The 10 rules are:

phone. But often, it helps to do just that. It also gives us an opportunity to discuss various payment options with the customer. Another important point to note is, ensuring, we get all the relevant information from the customer. Its very simple, if we do not have contact details, there is not much chance to contact them. This must be done while filling out the agreement itself. It is also worth noting that it is helpful to draw their attention to Point 8 of the agreement which gives us the authority to dispose off their goods if they violate any part of the agreement. While many of us may think that we can make a positive judgement about a customer when they move-in, don’t let this get the better of you. Stay on top right at the very start when they default the first time. You do get the “grumpy” voice on the other end of the line questioning your call to remind them that the rent is due. Explain to them this is just a courtesy call and is part of your job to do it. Go easy on waiving the late fee as if done with no consequence, there is a tendency from the customer to expect it every time. Customers do have the option of using the Oops card for a first default. So, go ahead and make a big deal when you suggest they use it to avoid that late fee. It is a first sign for the customer that you will not tolerate late payments. When all this fails, fall back to the use of Perpetual Late Payer letter. Get a commitment from the customer and follow-up promptly on these. Another golden rule to observe while doing all this is making notes in Storman. Besides assisting us in the eventuality of a legal recourse, it also keeps us aware of what has happened so far. When there is no option left, promptly act with the disposal procedures. Due to the legality of the situation, take your time and follow every step involved in this process. Remember, the quicker you act, the easier it ends.

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Kennards Kourier February 2009