According to the latest statistics fromImodirect, an online real estate agency specializing in rentals and rental management, unpaid rentals continue to increase. In February 2023, unpaid rents remain at a high level. With the exception of Île-de-France where they are experiencing a marked increase. In the majority of these cases, they are quickly resolved. However, some require the intervention of the bail the tenant or the lessor’s unpaid rent insurance. In this, Imodirect warns against this trend and underlines the importance of securing rents as an essential element of rental management.
Unpaid rents: reminders for unpaid rents are on the rise again
The figures published by Imodirect reveal a sharp increase in reminders for unpaid debts during the crisis period linked to the COVID-19 pandemic. Indeed, between March 2020 and March 2021, reminders were multiplied by 2 in Île-de-France and almost by 3 in the region. This period also corresponded to the time when state aid was most important.
Stabilization of unpaid rents at a high level, but with worrying signs
After this period of significant increase, the delinquency figures stabilized, but at a high level compared to the average of the previous years. However, according to Arnaud Hacquart, president and founder of Imodirect, the impact of inflation and soaring energy prices is clearly beginning to be felt.
Moreover, at the end of last year, we observed a significant deterioration in the number of non-payments. Unfortunately, this deterioration appears to be continuing. Now the numbers have reached a particularly high level. Imodirect emphasizes the need for increased vigilance in the face of this worrying situation.
Unpaid rents in Île-de-France reach an alarming level
A significant increase in “small” outstanding payments
In Île-de-France, unpaid rents of low amounts, requiring a follow-up from the first day (D + 1), have experienced a remarkable increase. It should be noted that in March 2020, these outstanding payments represented only 5.22% of Lease contracts.
But, this figure climbed to exceed 19% in March 2023. Finally, the situation deteriorated after the health crisis, with the rate reaching 17.31% in March 2021, then 13.23% in March 2022.
Unpaid rents: a continuous increase in reminders at “D + 5”
Reminders made five days after payment due date (D+5) also increased significantly. In March 2020, they represented 3.12% of leases, then reached:
- 6.96% in March 2021,
- 7.11% in March 2022,
- 10.01% in November 2022.
In March 2023, this figure reached its highest level to date, standing at 10.12%.
A sharp increase in unpaid amounts exceeding one month’s rent
Unpaid rents for more than one month, resulting in a “D + 30” reminder, also saw a significant increase. Before the pandemic, they represented only 0.89% of rental contracts. But this figure has climbed to 3.03% currently, thus reaching a record. This worrying situation requires urgent attention to prevent negative consequences on landlords and the real estate market.
Arrears in the region are experiencing a worrying increase
A surge in reminders on D+1 in major cities
In the 10 largest cities in the region, reminders for non-payments from day one (D+1) have experienced dizzying growth. In March 2020, these raises represented 7.02% of leases, then reached 22.02% in November 2022. To finally reach an even higher level at 23.51% to date.
In March 2023, reminders on D+5 also saw a significant increase, from 3.65% to 13%. Similarly, unpaid rent exceeding 30 days fell from 0.92% to 3.32% over the same period.
The predominant “small” outstanding payments in the rest of the territory
Outside the big cities, low-value unpaid bills have always been higher. In March 2020, they represented 9.23% of the rental stock. Then, they increased to reach:
- 24.78% in March 2021,
- 23.96% in March 2022,
- 23.25% in November 2022,
- 23.98% in March 2023.
Thus, reminders on D+5 represented 16.52% in March 2023 (compared to 6.12% in March 2020), and those on D+10 reached 11.20% (compared to 3.74% in March 2020). Unpaid bills exceeding 30 days rose from 1.25% to 3.89%, reaching their highest rate.
Intermediation, a guarantee of security against unpaid rents
The data provided by Imodirect reveals a significantly higher proportion of unpaid bills in the assets recovered in transfer by the agency. That is to say, files which were directly managed by lessor owners before they are accepted by the agency.
“ The vast majority of rental files that we collect were directly managed by the owner, without going through a professional. ” – Arnaud Hacquart.
Whether in Île-de-France or in the regions, properties rented through Imodirect have a lower rate of unpaid bills compared to other properties. Moreover, this difference is partly explained by the rigorous and professional policy of the agency in the evaluation of rental files.
“I can strongly advise landlords to secure their investment by taking out insurance against unpaid bills and rental damage.” -Arnaud Hacquart.
Controlled rates thanks to the Imodirect approach
In Paris and Île-de-France, the proportion of unpaid invoices over 30 days reached an average of 4.14% in the transfer base. While on properties leased by Imodirect, this rate remains under control at 1.92%.
As for properties rented by owners in the 10 largest provincial towns, they show a particularly high rate. since they exceed 5%, compared to a rate of only 2.56% for the fleet managed by Imodirect.
Intermediation in rental management proves to be a guarantee of security against defaults. In addition, landlords are strongly encouraged to secure their investment by taking out insurance against unpaid rent and rental damage. In this, this professional approach makes it possible to reduce the risks and to guarantee a more secure rental management.
Faced with the growing concern of unpaid rent, it is essential to take measures to protect landlords and accelerate the collection of unpaid rents. Because, eviction procedures can be long and costly. And, most often, they require the intervention of a bailiff, a lawyer and a judge. However, there are amicable solutions to recover unpaid rent and avoid additional costs related to legal proceedings.
In addition, note that subscription to the Visale system offers protection against unpaid rent for up to 36 months. In addition, it makes it easier for tenants in difficulty to obtain housing. In this, preventive measures can include a guarantee clause or the subscription unpaid rent insurance (GLI)providing coverage in the event of default.
> See our article on: “Insurance of unpaid rents: Cautioneo twists the neck of received ideas!”
Finally, if you have to start recovery proceedings, get advice from a professional, such as a lawyer specializing in real estate law. Note that it is possible to take legal action to obtain reimbursement of the debt. But, it is best to explore amicable ways first to avoid additional charges. Thus, it is possible to recover unpaid rents while limiting costs and accelerating the process of resolving unpaid debts.