Commercial property arrears: what actually counts as ‘past due’?
Short answer
In commercial property, ‘arrears’ means amounts that are past their due date and still unpaid — not everything an occupier will eventually owe. A demand that has been issued but is not yet due is outstanding, but it is not in arrears. Reporting the two as the same thing overstates the problem and muddies collection decisions, so arrears should be measured as the past-due portion only.
Arrears vs. total outstanding
Total outstanding is every unpaid demand on the ledger, including rent for a period that has not yet begun. Arrears is the subset that is already overdue. An occupier who has paid everything due so far but has a future quarter’s demand issued is outstanding, not in arrears.
The distinction matters for action: arrears drive chasing, interest and, ultimately, recovery — decisions you should not base on money that is not yet payable.
Ageing arrears with FIFO
When a payment arrives against several demands, the usual convention is first-in, first-out: the oldest demand is cleared first. This ages the remaining balance correctly into current, 30, 60 and 90-day buckets.
Getting FIFO right is what lets you say, accurately, how much is 60 days overdue versus merely outstanding — the number that actually predicts a collection problem.
Why one consistent figure matters
If the dashboard, the property card and the lease each compute arrears differently, nobody trusts the number. PropertyAxis360 derives arrears once — the past-due total from a FIFO-aged ledger — and shows the same figure everywhere: home dashboard, portfolio cockpit, property card and lease headline.
Frequently asked
Is ‘arrears’ the same as ‘outstanding’?
No. Outstanding is all unpaid demands; arrears is only the portion that is past its due date. Future-dated demands are outstanding but not in arrears.
How are commercial rent arrears aged?
Typically FIFO — payments clear the oldest demand first — so the remaining balance ages correctly into current/30/60/90-day buckets.
Does arrears include VAT and service charge?
It includes whatever has been demanded and is past due — rent, VAT on rent, and service-charge demands alike — provided each is genuinely overdue.
Track this properly in PropertyAxis360.
Key dates, arrears and access — one governed platform.