In the era of technology and automation, real estate professionals can only benefit from using pre-authorized debits to improve their property management. Nowadays, performance is defined by the time you save, and the mistakes and late payments you avoid.
What Is a Pre-Authorized Debit?
The pre-authorized debit (PAD), or pre-authorized payment, has been Canada’s most common form of payment for 20 years, especially for recurring payments, such as rent. It is a safe and inexpensive method.
This method is simpler than you think. The pre-authorized debit happens in 3 short steps. The property owner or manager:
- Receives the tenant’s authorization (through a form) to withdraw the monthly rent from their account and asks for a void cheque;
- Fills out the appropriate form, which is online (or in their real estate software, Proprio Expert), with the details of the debit;
- Sends the form to their financial institution, which will carry out the transactions according to the frequency of payment (monthly or other).
The Advantages of Pre-Authorized Debits for Landlords
- Can save time;
- Allow property owners and managers to receive their payments on time, without having to wait for their tenants to pay;
- the need to prepare deposit slips
- trips to the bank
- late deposits due to a large amount of deposits or to the distance from the financial institution;
- Secure and regularize the amounts.
Is This Payment Method Safe?
Absolutely! Canada’s rules and regulations for pre-authorized debits are some of the strictest in the world. Payments Canada is the organization responsible for this industry. Operators who fail to comply with the organization’s regulations are subject to severe sanctions. Moreover, you can file a complaint in case of problems. You can learn more about this service with Otonom Solution, Quebec’s only payment solution specialized in real estate and a partner of Proprio Expert.