Collections

COLLECTIONS

CARDINAL WAY OF COLLECTIONS (“CWoC”) SUMMARY Collections is a pillar of property management, and at the heart of our collections efforts is the fundamental belief that it is our duty to our Clients and Ownership Groups to collect every dollar owed to them. One of the most important responsibilities of our onsite team members is to collect all monies owed to the Community, per the terms of the lease agreement.

Through the utilization of automated notices and clearly defined monthly workflows, the Cardinal Way of Collections is intended to create efficiencies for the on-site team, our accountants and the entire operations team.

SOP SUMMARY There are multiple operating procedures (“SOPs”) that help our teams understand “the Cardinal Way” of performing our responsibilities related to collecting monies owed. Below is a summary of those SOPs: SOP TITLE Write-Offs (former residents) Notification and Collection of Returned Checks

SOP Standard # 469 445

Eviction / Nonpayment

465

Delinquencies

467

Debts Owed by Former Residents

470

Late Charges

464

Move-Out Process

502

Skips and Abandonment Late Notices (FORMS)

503 4640

CURRENT RESIDENT A/R MANAGEMENT CWoC Process ● ●

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Onsite Teams are expected to collect rent and utilize the new “Residential Correspondence” functionality in Entrata for all templated notices to residents.

Though site-by-site customization is possible, there are five primary notices that can be sent through the Residential correspondence function: 1. Resident Statement - Pre-Billing (Sample Attached) - Automatically sent to all residents on the 28th of the month to let them know where their account sits heading into the new month; prepayment, zero balance, balance due 2. Resident Statement - Balance Due (Same Sample as Pre-Billing) - Automatically sent to all residents on the 2nd of the month to let them know where their account sits after rent was posted on the 1st.

3. Late Notice (Sample Attached) - Sent to all residents after a late fee has been posted to their account. Can be automatically generated, or completed manually one at a time.

4. Small Balance Due (Sample Attached) - Manually sent to all residents who have a small balance of $100 or less.

5. NSF Notice (Sample Attached) - Manually sent to a resident after receiving notification of an NSF payment.

Onsite Teams are still responsible for making daily A/R collection calls and unit visits to Residents and guarantors with balances, then making applicable collection notes in the form of a Entrata Memo.

FORMER RESIDENT A/R MANAGEMENT CWoC Process ● ●

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CGM uses a weekly RD Fuller submission and extraction process.

CGM will start collecting on past accounts after “30+ days” versus “61+ days” which is the standard for many companies. This ensures that residents with past due accounts are pursued, via RD Fuller, sooner which increases the likelihood the communities will recoup outstanding balances.

By end of business (“EOB”) each Monday, on-site team members prepare a list of all “Past” residents with outstanding debt aged past 30 days, as well as residents who skipped or were evicted.

By EOB each Wednesday, electronic RD Fuller Submissions are due to APMs for review.

By EOB each Thursday, Assistant Portfolio Managers (“APMs”) review all accounts to ensure all have been marked as "ready", that all documents are attached, and ensure all accelerated rent is charged to the account. Extractions will occur on Friday before business hours.

RD Fuller sends HQ Accountant New Business Acknowledgement (“NBA”) once the extraction is completed on their end and all accounts have been accounted for.

All write-offs are processed by your HQ accountant once the NBA is received.

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