An agency collects rent that is not its own. Remittance is handing it over, and the statement that goes with it is the agency's account of its stewardship.
It is the product a landlord is actually buying. Everything else the agency does is invisible to the owner; this arrives every month and is the only routine evidence of whether the work is being done properly.
What a checkable remittance shows
- Rent collected in the period, by unit, with the dates.
- Less expenses paid on the owner's behalf: repairs, levies, statutory payments, each itemised with the invoice reference.
- Less commission, at the agreed rate, shown as a calculation rather than as a figure.
- Net remitted, with the date and reference of the transfer.
The word doing the work is derivation. An owner receiving a single net figure has to take it on trust. An owner receiving the arithmetic can verify it in two minutes, which is the difference between a relationship that survives a bad month and one that does not.
A worked statement
Four units, September.
| Line | Amount | | --- | --- | | Unit 1A rent, received 3 Sep | 32,000 | | Unit 1B rent, received 2 Sep | 32,000 | | Unit 2A rent, received 11 Sep | 38,000 | | Unit 2B, vacant from 1 Sep | 0 | | Rent collected | 102,000 | | Less: 2A cistern repair, inv. 4471 | (4,800) | | Less: block service charge levy | (12,000) | | Less: commission, 8% of collections | (8,160) | | Net remitted, 5 Oct, ref DMX-0912 | 76,840 |
Three things that statement does which most do not. It shows a vacant unit as a zero rather than omitting it, so the owner can see the vacancy. It shows commission as a calculation, so the base is visible. And it names an invoice number against the repair, so the expense can be checked.
Two structural disciplines
Produce it from the ledger, not alongside it. A statement assembled separately at month end is a second set of books, and second sets of books drift from the first. If the statement and the ledger are derived from the same records, the summary and the detail cannot disagree.
Deposits never appear as income. A security deposit is held on trust for the tenant and belongs to neither the agency nor the landlord until the tenancy ends. Remitting a deposit to the landlord as part of a month's collections is a mistake that only surfaces at move-out, when it has to be found again.
The commission question
The commonest cause of the monthly phone call is a commission figure with no derivation. State the basis explicitly:
- A percentage of what: collections, or billings? Those differ whenever a tenant is in arrears, and an agency charging on billings is charging on money it has not collected.
- Charged when: on receipt, or on the month's charges regardless?
- Excluding what: is commission taken on recovered service charge, on utility recharges, on deposits?
Answer those three in the management agreement and the monthly call stops happening.
What goes wrong
It arrives late and irregularly. A remittance date that moves is the single fastest way to lose a landlord's confidence, because it reads as a cash flow problem at the agency whether or not it is one.
Expenses appear with no invoice. "Repairs: 18,400" is not an expense record. Each item should name what, where, who and the invoice.
Arrears are invisible. A statement showing only collections tells an owner what came in and nothing about what did not. The arrears position belongs on the same document.