May 26, 2016
The Sliding Scale of Bad Tenants (and What to Do About It!)
Most tenants are good people, but in every basket of good apples, there’s at least one bad one. Unfortunately for property managers, there’s a sliding scale of bad, from “okay tenant who never pays rent on time” to “tenant from hell who hasn’t paid in months and whose children are using the apartment walls as their own modern art canvas.”
Making matters worse, it can be a real struggle to get rid of a bad tenant. Many landlords find that the legal system favours tenants, who have access to free legal advice and can significantly prolong cases through counter-complaints, adjournments and appeals. While it’s important that renters be protected, the system can make things very frustrating, time-consuming and costly for property owners.
But that doesn’t mean all hope it lost. As a property manager, you do have recourse.
Common Situations & Cogent Solutions
The Late-Paying Tenant: You know the one. They might mean well, but for whatever reasons, this resident can never get it together and pay on time. Rent is always late by 10, 15, 20, even 30 days – or more! So what can you do?
Whenever possible, switch this type of tenant over to an online rent payment option. This way, their rent will be automatically transferred, on time, from their credit card or bank account.
If online payment isn’t an option, use rent reminders. Set them up to go out automatically seven days before rent is due, then again on the due date, and again three days after. You might also consider downsizing them to a more affordable unit, in case you suspect that their finances are behind the late rent payments.
If the tenant has a history of non-payment or has been difficult in other ways (high noise levels, etc.), you may want to start the eviction process immediately. In some provinces, you can send a notice of non-payment as soon as the rent is late; in others, there may be a three-day grace period. Be sure the notice includes the amount of rent the resident owes, the date the renter is to move out and a statement that says the tenant can disagree with the landlord’s notice.
The Mostly Good Tenant Who Can’t/Won’t Pay Rent: From maintenance and repair disputes to sudden loss of income, some residents who have previously been cooperative will temporarily stop paying rent. In these situations, clear communication is critical.
Remind the resident of their legal responsibility to pay rent and see if you can work out a payment schedule. Many renters have the means to make up one month’s rent if they’ve fallen behind. Look into the programs available for tenants and try to come up with a solution.
If the tenant is withholding rent due to a maintenance or service dispute, quickly take action to ensure the repairs are done to their satisfaction. Be sure to have an audit-proof trail of maintenance history.
The Habitual Bouncer: They don’t mean for it to happen, but more than once a year, this renter’s cheque bounces. First of all, ensure your legal agreement has clear guidance as to how your organization handles insufficient funds, so that you and your tenant are aware of the subsequent penalties or late fees.
Once you’re certain the consequences have been clearly communicated, you have a few choices. If the person is a good tenant in bad times, switch them over to an automated rent collection solution. If you suspect you have a deadbeat on your hands, begin the legal process of eviction.
The Professional Tenant: At first glance, they looked like a great prospect, and their reference landlord said, “No problems at all!” Then your professional tenant moved in and the game was on. This person knows every legal loophole and will use them all to their advantage while they’re residing on your property. And, for kicks, once they know it’s game over, they might even damage the unit on their way out.
In this case, you have no choice: Be decisive and start working towards an eviction immediately. If you’re in Ontario, it involves sending an N4 form. (Tip: Before sending this form, make sure you can answer “yes” to all the questions here.)
It takes a minimum of three to four months to evict a tenant who won’t pay. Ensure that you have an auditable record of communication between the tenant and the landlord.
Your Best Line of Defence: Winning the War on Bad Tenants
With luck, your dealings with these types of troublesome tenants will be kept to a minimum. But when they do darken your door – whether or not they mean to cause problems – it’s important that you know what steps to take, and that you don’t delay in taking them.
At Property Vista, we can help you implement the systems and processes to minimize late payments, ensure a clear audit trail and improve renter satisfaction with issues like maintenance requests. To learn more about how we can help you mitigate the consequences of bad tenants and protect your bottom line, sign up for your free account today.