Late rent is the single biggest source of stress for many portfolios. Each overdue payment triggers phone calls, letters, breach notices, and tribunal prep—often for just a few hundred dollars.

AI-driven arrears tools cut this workload by predicting risk early, automating polite reminders, and assembling evidence packs while you sleep.

The old pain points

• Manual ledger checks every morning.

• Chasing calls & emails that tenants ignore.

• Paper breach notices typed from scratch.

• Late discovery—you act only after money is already overdue.

Agencies report spending 5–7 hours a week per 100 tenancies on arrears when done by hand. ourproperty.com.au

How AI turns the tide

Core technologies in plain English

• Predictive analytics – Learns from past payment patterns to warn “likely to go overdue next week”.

• Natural-language bots – Craft friendly, personalised nudges via SMS, email or WhatsApp.

• Robotic Process Automation (RPA) – Copies amounts from ledger into breach notice templates—no re-typing.

• Open-banking links – Confirms cleared funds in real time, not next business day.

“Ten-Day Safety Net” workflow

1. Day –3 (forecast)

   • Predictive model alerts: “High risk tenant – wages fortnightly, public holiday ahead.”

   • Chatbot offers pre-emptive reminder and flexible pay-date option.

2. Day 0 (due date)

   • Open-banking link confirms cleared funds by 10 am.

   • If unpaid → polite SMS: “Rent now due. Tap to pay.”

3. Day 2 overdue

   • NLP bot sends warmer reminder + direct BPAY link.

   • System records contact for tribunal evidence.

4. Day 4 overdue

   • Automated call offers payment-plan wizard; tenant selects $ amount + dates.

   • Plan auto-loads to ledger; owner notified.

5. Day 7 overdue

   • RPA drafts breach notice (Form 11 QLD / Notice to Remedy).

   • Manager clicks “approve”; PDF e-mailed & SMS link sent.

6. Day 10 overdue

   • If unpaid & no plan, AI assembles tribunal bundle (ledger, notices, comms log).

   • Calendar hold for hearing auto-created.

Manager touch-time: ~5 minutes; tone stays friendly until law requires escalation.

Real-world wins

• Less admin:  Slash arrears follow-up workload by automating notices and payment plans. 

• Faster clearance: Ai predicts shortfalls early, letting housing providers intervene sooner and cut chronic arrears. 

• Tribunal-ready docs: AI exports full evidence packs, avoiding lost cases due to missing records.

Implementation roadmap

1. Health-check – Note % of tenants > 7 days late and staff hours spent chasing.

2. Pick a pilot module – e.g., PropertyMe Arrears Automation if you already use PropertyMe.

3. Integrate payments – Enable BPAY, card or wallet links so reminders convert on the spot.

4. Customise tone – Align bot language with your brand voice; include “speak to a person” option.

5. Set guard-rails – Human approval for breach notices or tribunals.

6. Educate tenants – Send a simple FAQ on automated reminders and privacy.

7. Track KPIs – Arrears %, average days late, staff hours saved, recovery rate.

8. Expand features – Add predictive alerting or open-banking once basics perform.

Key numbers to watch

• Arrears ratio – Target < 1 % of rent roll unpaid after 7 days.

• Average days late – Aim for < 3 days.

• Staff minutes per arrears file – Push toward single digits.

• Successful payment-plan adherence – > 80 % success is achievable with reminders.

• Owner satisfaction (post-statement survey) – Should rise as arrears fall.

Risks & ethical checks

What’s next?

• Real-time payroll splits – Rent deducted from wages before it hits the tenant’s bank.

• AI credit buffers – Micro-loans triggered automatically to protect tenancies during cash-flow shocks.

• Voice-activated pay – Tenants say “Pay rent now” to their phone assistant; funds clear instantly.

• Dynamic insurance – Landlord policies adjust premiums automatically as arrears risk falls.

Smart arrears systems don’t just collect rent; they keep more tenancies stable, owners happier, and managers free for higher-value work.

Author – Ken Hobson.