Andrew Macdonald: N.B. landlord offers tenants bi-weekly rent payments

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In his second business chapter as a landlord to apartment tenants, Ron Lovett prides himself on his ability to offer affordable tenant prices for society’s working class.

The former Source Security Guard entrepreneur turned that company into a national tour de force from headquarters in Halifax. Lovett ended up selling that business and now has a big hand in apartment landlording.

His firm VIDA Living controls 2,700 apartments in Metro Halifax, as well as Saint John and Oromocto in New Brunswick and Charlottetown on Prince Edward Island, as well as controlling residential units in Winnipeg.

“Our N.B. portfolio consists of 30 buildings and 458 suites. Currently, 153 have long-term affordability commitments in place,” said VIDA spokesperson Joel Goodman.

Affordability issues are important to Lovett.

In a statement, the landlord notes: “VIDA remains committed to helping solve affordability challenges for working-class Canadian renters by delivering its unique brand of low-cost accommodation. Over 1,200 of VIDA’s 2,700 units are committed to long-term, deep affordability with future rent increases capped at the Consumer Price Index for Shelter (or less).”

This story is on a new development at VIDA, which ought to be paid attention to by the other landlords who control 70,000 rentals in HRM.

What I am referring to is that Lovett’s VIDA is now offering bi-weekly rent payments over its 2,700-unit portfolio – rather than monthly payments, which can be larger and create some struggling tenants on a residential basis.

“VIDA partnered with Zenbase to provide credit reporting and split monthly rent payments for its residents in these tough financial times,” stated VIDA in a news dispatch.

That file caught my attention, because for a 10 year period I owned a condo in downtown Halifax, and my banker allowed me to make bi-weekly mortgage payments, which I found easier to balance my tight finances. Typically that option is not available to tenants who pay one large sum at the beginning of every month.

To understand this novel approach to collecting bi-weekly rent in an era when the cost of living issues have made it difficult for society, I caught up to the financial pointman at VIDA – a man named Mark Hammond.

Here at VIDA our main purpose is revolutionizing affordable communities. In order to revolutionize, we are always thinking outside the box.

Mark Hammond

“Here at VIDA our main purpose is revolutionizing affordable communities. In order to revolutionize, we are always thinking outside the box.”

So by partnering with a financial firm and software company like Zenbase it allows VIDA to collect bi-weekly rents, as opposed to a monthly lump sum.

If a tenant wants to go on bi-weekly rent payments, then Zenbase collects that rent and then pays VIDA directly.

“They are able to split up that amount over two payments,” Hammond said. “VIDA only allows our customers (tenants) who are not in arrears to use Zenbase, because they are the ones paying VIDA on behalf of the tenants.”

There is a service cost of just under $10 per month paid by the tenant to use the Zenbase platform, plus a small percentage fee for the rent payment program.

“They are able to split up that rent. The key thing for the renters, it needs to be set up on the 26th of every month to ensure there are no insufficient funds or any bounce backs, so the reporting can be done directly to us in time for the end of the month,” said Hammond.

The rationale of VIDA offering this payment program on bi-weekly rent payments is “it allows our customer to free up cash between pay cheques. The person’s largest monthly expense tends to be a mortgage. It is about allowing the renter to have better and stronger financial empowerment and to operate within a rising cost environment,” added Hammond.

“The other thing it allows for – and this is what we encourage for all our customers (tenants) to budget – something that is becoming more challenging in a higher cost environment,” he noted. “We want to make sure we are providing secure and affordable housing for our customers and in order for us to do that and keep rents low, we need to be able to collect.”

Zenbase is located in Ontario and markets itself as a financial tech company.

How does VIDA give up monthly rent revenues, when it might have monthly mortgage payments on its apartment portfolio?

Hammond replied that Zenbase pays VIDA full monthly rent, even though the firm collects rent bi-weekly. “That is where there is a cost, when they are fronting the money, they obviously have their own internal costs.”

Hammond said of the overall apartment tenants at VIDA 20 per cent of renters are using the bi-weekly option.

Oromocto tenant calls bi-weekly payments convenient

For this story I talked to a VIDA tenant at its Oromocto portfolio, Claude Gallant, a senior citizen, who is a civil servant at the Gagetown military base, and who has opted into bi-weekly rent payments.

“I find it very convenient,” said Gallant. “Everybody has different monthly bills they have to pay, they don’t come all at the same time. And, when you have to pay a large sum at the end of the month, it leaves you with nothing to get you through to the next pay. I find when you can split your rent like that, you can cover all your bills and still have enough to carry you through to the next pay.”

Gallant has nothing but good things to say about the rental option with his landlord.

“It has been handy for me – there is nothing worse than being short (of cash) and the next thing you know you have bills that have to be paid and it might be late, which is not good for your credit rating. At least when you get your split rent you know you have enough money to cover everything throughout the month,” he added.

“To me, it is a win-win situation, for me anyway.”

Because of service fees, he pays for bi-weekly rent, which means Gallant is paying more for rent on an annual basis. However, he says he is paying for the convenience of bi-weekly rent. “It’s only $10 (extra) a month. But, for the convenience, you can’t beat it, really. I do not find it impacts me that much,” said Gallant.

Gallant wonders if other New Brunswick landlords might study the VIDA model and offer it to their own tenants.

“I think it would help a lot of people in the long run, because people are struggling to pay their rentals, and rents seem to be kind of climbing all the time. Something has to be done (to help others out). You are paying the same price, it is just split in two (payments)”, he added.

Gallant has been living in the same rental for the last five years. He says he wants to remain with VIDA, just because of its payment options.

As a civil servant at Gagetown’s military base, he admits the pay is good.

“I have a good paying job, but even with the job I have sometimes I find now lately it is just more money going out than there is coming in for your own personal use. It is not like it used to be, it is just that everything is tightening up more, the price of groceries is going up, and I am fortunate at least I can look after myself, I am a single person so I don’t have to look after someone.”

But, he said he would not go back to paying rent the first of the month. “I am quite content with the split rent.”

Andrew Macdonald is a Halifax-based business and political journalist with an online publication called The Macdonald Notebook. He writes a biweekly column focused on Maritime business issues for Brunswick News.