All landlords want tenants that are reliable, who pay their rent on time and take care of the property as if it was their own. We have all heard horror stories about a bad or problem tenant who has negatively impacted a landlord both financially and emotionally.
Unfortunately for some of you reading this, you have already been personally affected by bad tenants who have failed to pay rent, trashed the residence and turned your once immaculate property into a squalid eyesore. So, you maybe questioning as a landlord, what can I do to avoid bad tenants and eliminate potential problems that these tenants may cause.
Well, the answer is not that simple. You can hire a good property manager who is experienced in screening potential tenants, has a trained eye when reviewing applicants, can identify red flags and warning signs and deal with any issues and/or conflicts that arise. A good property manager has processes in place to thoroughly screen potential tenants, but at times, the tenants that have ticked all the right boxes, can often have negative behaviours which unfortunately are only identified after the lease has been signed.
Let’s face it, as a landlord you don’t want to be thinking about whether your tenants will be paying their rent, causing damage to your property, upsetting the neighbours or using the property for criminal activity.
Being able to detect a bad tenant just by looking at them is a difficult task. Bad tenants come in many shapes and sizes. This makes it difficult in identify those that may prove to be troublesome. To eliminate some of the potential risks associated with bad tenants, let’s look at some of their behaviours and characteristics.
1. Late Paying and Partial Paying Tenants
This is the most common problem with bad tenants. It is important that at the lease signing you highlight the importance of paying your rent on time, communicate to the tenants your expectations with regards to rental payments and refer to the lease conditions that clearly state, it is the tenant’s responsibility to pay their rent by the due date.
The late payers and partial payers always seem to have an excuse as to why they are late in paying their rent and will always try to be appeal to your emotional side. As a landlord, it is important to remember that this is a business transaction. In saying that, there are often instances where a good tenancy becomes a bad tenancy. This may be due to one of a host of variables that are beyond the tenant’s control (e.g. a tenant becomes unemployed or has a relationship break up). In these instances, communication is the key to a good outcome.
2. Destructive Tenants
Damages to a property, whether it’s intentional or accidental is the second most common problem, after late payers. The destructive tenant can cause the landlord a lot of grief both financially and emotionally. This can be minimised by conducting regular inspections of the property (every 3 months is ideal) so as the landlord, property manager can see how the residence is being maintained and identify any damage or unapproved improvements or additions that may have been made to the property.
If you identify any add-ons or damage to the property during your inspections, advise the tenant that you are aware of this and that they are in breach of their lease contract. This would be followed up by issuing the tenant with a (Form 11), Notice to Remedy the breach of the Tenancy Agreement.
3. Constantly Partying and Overly Hospitable Tenants
We all love social and hospitable people, however as a landlord, you really don’t want to have tenants that upset their neighbours due to their outgoing, generous and social nature. Most of us enjoy a good party from time to time, however weekday parties that continue into the early hours of the morning is not something we appreciate, especially when we need to be waking up early and heading to work.
The hospitable tenant is the one who loves to help out a friend and lets them stay at the property for a month, which then extends to 6 months, but fails to inform the landlord that there is an additional tenant residing in the property. Further, with the increased use of Airbnb as a short term leasing portal, landlords need to be aware that tenants may be using this platform to sublet the property. This will increase the level of general wear and tear to the property and increase the chances of property damage. Not to mention this is a direct breach of their lease agreement.
Again in this instance, the Tenant would be issued with a (Form 11) Notice to Remedy the breach of The Tenancy Agreement. If this does not generate the desired outcome, the tenant can be issued with another Notice to Remedy the breach. If his still does not solve the problem, then a third and final Breach Notice can be issued and the Property Manager or Owner can apply to QCAT to have the tenancy terminated on the grounds of repeated breaches. Please note all breaches must be of an identical nature or QCAT may not be willing to terminate the lease.
4. High Maintenance Tenants
Most property managers and landlords would have run into these types of tenants; those that are never happy and constantly find some fault with the property they have leased. Their complaints are often quite unjustified or unreasonable which results in you wasting hours of your time.
It is your responsibility as a landlord to maintain the property in a good order, that is safe and secure for tenants. A good property manager will be aware of general maintenance requirements of the property when they conduct their ongoing and quarterly inspections. Any repairs that are necessary will be communicated to you the landlord in a clear and concise manner, generally in the form of written correspondence. With regards to these tenants, it is best to let their lease run for the allotted time and then reassess once they are of lease.
5. Pet Smuggling Tenants
These types of tenants have pets and lease a property even though the landlord has specifically requested that no pets are allowed. When conducting a property inspection, the first thing you notice is a dog bowl and a dog bed. You then proceed to ask the tenant about the dog bowl and bed. Their response is quick and sharp. “The dog is not mine. I’m just looking after it for a friend, whilst she is in hospital for a few days”. Again, the tenant plays on your emotions. Don’t compromise your position, just request that alternative arrangements be made for the pet as soon as possible. If alternative arrangements are not action-ed by the tenant then a Form 11, Notice of Breach should be issued to the tenant requesting that they rectify the breach.
If you have given pet approval to tenants at the property, make sure you complete regular inspections to ensure that the pets have not caused any damages to the property and that the residence is generally being kept in good order.
6. The Lawbreaking Tenant
The law breaker is not as common as those mentioned above however; they can be even more costly to the landlord than the late payer. The lawbreaker involves themselves in illegal activities, which not only can affect you as the landlord, but can also have a negative impact on the surrounding neighbourhood and community.
With the increase in backyard drug manufacturing, landlords need to be vigilant. If you suspect that there is drug manufacturing or any other illegal activity taking place at your property, seek the assistance of the police. This actually goes beyond a Form 11, Notice of Breach and becomes a criminal matter if your suspicions are proved correct.
Bad or problem tenants are part of the minority; however their behaviours can have a dramatic impact on the investment risk of landlords. Stringent screening processes assist greatly in finding good tenants however, always be conscious of the fact that these types of tenants can still make their way into your investment property. A good property manager will reduce the risk of this situation eventuating. If you are a private landlord then always check the TICA National Tenancy Database to make sure your prospective tenant does not have a default listed against them. The cost of carrying out a TICA search is only $14.95 per applicant.