Deadbeat Tenants
The deadbeat tenant is every landlord’s worst nightmare. Find out how to avoid them by reading this.
You’re just a small time landlord with a big time headache. You’ve been stuck with a deadbeat tenant. There are two types of non-paying tenants, those who just don’t have the money and the professional tenant. Look out for the professional tenant; they know more about landlord-tenant law than most lawyers. It usually takes at least six months and a lot of money to remove a profession tenant. Do you have an iron-clad lease or tenancy agreement that will stand up in court? Was it one you downloaded off the internet for free or did you purchase a pad of 25 generic leases from your local book store? There are things you can do as a landlord to limit your exposure to becoming the professional tenant’s next victim.
Start by getting a copy of your local landlord-tenant laws. These vary, sometimes greatly, from jurisdiction to jurisdiction. Read it carefully and know what your rights are as a landlord should things go wrong down the road.
When a prospective tenant shows up you need to have them fill out an application to rent. This is not a lease or a rental agreement. Always make sure you get references as well as employment history and contact information for their current and former landlord. You also need to get written permission to do a credit check. If a prospective tenant is unwilling to give any of this information then move on to the next prospective tenant.
Take the time to call the references and previous landlords. A professional tenant will often get a friend to pose as their current landlord. To verify this use a reverse look-up of the phone number and see if the name and address match the information given. You can also go and see the previous landlord in person to make sure the information is legitimate. Spend the money on a credit report, it will be money well spent.
Once you’ve settled on who you’re going to rent to you need to get all your paper work in order. You need an iron-clad lease in case you need to evict. You need a pre-occupancy inspection report signed by both you and the tenant before they move in. This is important if you need to sue for damages at a later date. You should also get the vehicle information of the cars your tenants will be parking at the rental unit, including the VIN number. This is useful if you get a court awarded settlement because you can then put a lien on the vehicle for some or all of the money owed. In some jurisdictions you can also force the sale of the vehicle to cover the awarded costs.
If they pay by check keep a record of their banking information including account number. You may be able to garnishee their bank account should it become an option to recover damages.
The costs involved with protecting your property and investment from unsavory and professional tenants can be quite expensive. You have the lawyer’s fees for doing up all the paper work to make sure it will stand up in court. The time you spend verifying the references and costs of a credit check.
My former employer owns several rental properties on top of his other businesses. When I first took over there were no written leases or rental agreements on any of these properties. It took well over six months to get rid of a professional tenant as well as over $3,000.00 in court costs and Sheriffs fees to have them removed. This doesn’t include the lost rent, unpaid utility bills and damages. The last professional tenant I evicted was quick and reasonably painless. It only took 10 days to get a hearing and the adjudicator ordered the tenants be out in 10 days. It’s amazing how much time, aggravation and money proper paperwork can save you.
For more information on issues effecting landlords you my be interested in my blog at http://dead-beat-tenants.blogspot.com/2008/03/dead-beat-tenants.html#links. I hope you found some useful information here today.
I found http://www.NoPayTenants.com is for reporting deadbeat renters. All rental property owners need to checkout that website and post their deadbeat renters. When renters find out their name is on that database they quickly want to pay-up. Also, it helps other landlords from getting burned and you can check if any renter has a record.
I’ve had to evict my share of deadbeat tenants over the years as well. At least in Alberta where I am from they have started a service called the Residential Tenancy Dispute Resolution Service which streamlines the eviction process. I have a walk through of one eviction using this service on my blog, http://www.investors.housez.ca/blogroll/the-eviction-process-hearing-day/ Don’t worry it’s not as painful as it sounds!
As a first time Landlord, I, unfortunately, made every mistake in the book. And it cost me $10,000 in court costs. I had a nice rental home that my tenant, Terri Kulp, destroyed. She intentionally cut a special tree in the yard ($1600 – $2000) to replace. I had to chase her every month for rent payments. She told me she was suing her landlord before me and by the time we got her move out inspection, she had already contacted her attorney about her upcoming landlady. There were holes punched in bedroom walls, shower doors were shattered, ceiling fans were pulled from the ceiling, bedroom doors were kicked in and damaged, bathroom faucets were ripped out of the base. She is a walking, talking nightmare. And I always tried to be clam, fair, reasonable and understanding with her. I feel so sorry for the next people who have to deal with Terri and her family. The laws protect the tenants, not the landlords, so be very, very careful and document EVERYTHING in writing and sent it via registered mail to the tenant. Be very specific and clear. And good luck being a Landlord.
Renting is a business relationship between the landlord and the tenant. Why are landlords surprised by this? Both landlord and tenant should supply references. I am researching at the moment the business relationship between tenants and landlords. I find that even desirable tenants and landlords are not aware of all the legislature. I would be most grateful for your advice and knowledge regarding my research. Thank you for posting your blogs. I will read them and hope to gain a deeper understanding of the issues.
Renting is a business relationship between the landlord and the tenant. Why are landlords surprised by this? Both landlord and tenant should supply references. I am researching at the moment the business relationship between tenants and landlords. I find that even desirable tenants and landlords are not aware of all the legislature. I would be most grateful for your advice and knowledge regarding my research. Thank you for posting your blogs. I will read them and hope to gain a deeper understanding of the issues.