Instituting measures to strengthen contractual relationship of owner and tenants of a small family-owned rental business

• Main Author: Barcelona, Rizalina Rose A.
• Format: text
• Language: English
• Published: Animo Repository 2018
• Subjects: Landlord and tenant—Philippines; Cash management; Rent; Real Estate
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/6435; https://animorepository.dlsu.edu.ph/context/etd_masteral/article/13475/viewcontent/IAR_Barcelona.pdf
• Institution: De La Salle University

This Action Research study sought to address the lack of effectiveness in the current collection system of RA Barcelona Apartment Rental. This often leads to non-fulfillment of the contractual obligation of tenants in terms of their payment. From the business’ perspective, this problem was further manifested by cash flow issues due to delayed collection of rent and utility payments from tenants. During the initial analysis of the business’ issues, the Cash Management Model by MSEs was used as a guide to evaluate the different elements involved in managing cash flow of small businesses. At the same time, Ashby’s Law of Requisite Variety was used as framework in analyzing the collection of payments process and the issues involved within the current system. Two Action Research Cycles were conducted in collaboration with the participating tenants. During the First Action Research Cycle, intervention measures were applied which included sending of notification reminders to tenants, sending of billing statements online, and adjusting separate due dates for rent and utilities into a single due date. Moreover, a Second Action Research Cycle was done to address new issues which came up after the First Action Research Cycle. More specific control measures that adjusted to the variability of tenant’s situations and preferences were implemented. The results of the study showed an improvement in the collection of tenant’s payments after two cycles. Further to this, tenants concerns were also addressed which led to improved customer relationships and customer convenience. However, the cash flow issue of the business has not been fully resolved even after implementing the said changes in the collections system. Therefore, further investigation and research is recommended to address the cash flow issue. This study hopes to contribute to the body of existing knowledge on small family-owned businesses. However, its context is limited to a specific type of small business which is mainly engaged in apartment room rental for student tenants.