7 Tips on Dealing with Bad Tenants

Bad tenants: they’re the bane of the property manager’s existence. But there’s a lot you can do to protect yourself from the pain. You’ve heard the old joke: “This would be a great business except for the customers.” It’s not about property management per se; problem customers are among the biggest headaches in any service business.

You’d be hard put to find a manager with experience who can’t tell a horror story or two (probably many more) about rotten renters. The ones who treat the property like a flophouse, or sneak destructive animals (or a punk rock band) in. Or the pseudo-lawyers who pride themselves on “knowing their rights” when you confront them with problems and violations. Or the ones who know how to dance right on the edge of eviction, trying your patience but mysteriously knowing how to talk you into “one more chance.” And, of course the biggest category: the ones you have to haggle with over late rent and fines.

This being said, there are things you can do to both head off potential problems and to deal with them once they happen. There’s no reason to re-invent the wheel: thousands of property managers face exactly the same issues each day, and plenty of good information is out there about dealing with them.

We won’t address here how to prevent leasing to bad renters in the first place. Screening, interviewing, etc. is for another article. Our subject here begins at the time the renter has been approved and the leasing decision has been made.

Here are 7 tips for dealing with problem tenants:

1. Be friendly but firm from the beginning

Of course, you won’t lease many properties in the role of a cold and dictatorial property manager during the sales process. But after the leasing decision is made, it’s best to be very clear about what’s expected of the tenants in terms of on-time payments, keeping up the property, noise issues, guests, pets and other potential trouble spots.

This isn’t the time to be a buddy to the renter, or it won’t be long before you get that call for just “two more weeks on the rent” because of an unexpected dental bill, or learn the hard way that your renter is hosting concerts in the backyard and painting the walls lime green.

To be clear: issues of policy such as these do not have to interfere with friendliness. Good property managers make their tenants feel at home and are helpful and understanding. But too much solidarity with tenants often leads to their pushing the limits of the relationship. Be friendly and helpful, but firm.

Standing strong is a bit more awkward when the renter’s main contact is the same person who has to collect a late fee or make a demand. One strategy is to have the “enforcer” be a different person. But either way, firmness right upfront at the lease signing really pays off.

2. Put everything in writing

A comprehensive lease agreement is your best friend. Standardized lease forms are very helpful, but they won’t touch on your policies that are a bit different, or any of the unique features, amenities or special needs of a particular property you are managing. Take the time to customize each lease agreement to reflect in detail where your policies differ from the standard industry lease, and any rules or expectations specific to the property being rented.

3. Use certified mail for important notices

Every property manager faces situations in which renters claim they did not receive an important document, in order to delay whatever action is being demanded. You can avoid this by using certified mail for important notices, and prove notices were sent by including the certified mail article number on the document, sending a second copy by regular mail and keeping a copy for yourself. Just keep a stack of certified mail postcards and receipt slips at your office and you can get them ready before heading to the post office. Take away the “I never got the notice” excuse and you’ll save yourself a lot of headaches.

4. Prepare in advance for problems

If you’re lucky, you won’t often find yourself entangled in legal issues with renters. But renter’s protection laws can be arcane, and there are those out there who pride themselves on knowing these laws and beating unwary property managers over the head with them. That’s why it’s important to 1.) Either be familiar with these laws or have a “go-to” expert or attorney at the ready for when and if it happens.  2.) Make careful records of lease violations, problems experienced, neighbor complaints and other items that will help you make your case if the time comes; write all dates and the details.

5. Consider the neighborhood

Many neighborhoods are distinguished by having homeowners associations, neighborhood watches, and other formal or informal organizations. They can also have rules or merely expectations concerning vehicles (including RV’s) and parking, garbage pickup, pets in parks and schoolyards, exotic animals and more. As a property manager, you’ll avoid a lot of problems by knowing the quirks of each neighborhood and detailing them in a document you can provide to your renters before they move in.

6. Dealing with move-out trouble

One savvy property owner we know of attaches an “Intention to Vacate” notice to every new lease and reviews it with renters. If you’ve been renting for any amount of time, you’ve already experience renters who fail to give notice but ask for mercy, and renters who ask you to use their security deposit as their last month’s rent.

But a security deposit is a security deposit, not rent, and it’s there for a reason – a reason that remains important until the day they move out. Proper notice is there to give you time to find a new renter. Explain these things if you have to, and then just politely say no. You might even have to remind a renter or two that unpaid rent will affect their credit. If you’ve made sure from the get-go that your terms are firm, you will have a lot fewer problems with misunderstandings or conflicts at move-out.

7. If you need an attorney . . .

If an eviction becomes necessary, try to avoid choosing an attorney at random. Start by asking people you know for names, particularly if they’re in the business. If nobody can give you a reference, call an attorney or two you know in other fields, and ask them if they know someone who specializes in the area of evictions.

You can vet the attorney with a few simple questions. Ask them whether they specialize in evictions, how many evictions they do a month, and how long it generally takes them to get one done. You can even ask them how long it would take to get a particular case in front of a judge; if they know off the top of their head, it means they’re on top of the Landlord Tenant Court schedule, which is a good sign.

No matter how tight a business you run, you’ll eventually deal with problem renters. But if you make things clear from the day renters move in, and stick to your guns, you’ll find life will be a lot easier for you. Above all, don’t fall into the trap of feeling guilty when you don’t give in to renters asking for special consideration. You’re running a business, not a charity. If a renter says they simply can’t come up with their rent or late fee for another two weeks, it’s a credit union, friend or family member who should be loaning them the money, not you. Remember: friendly, but firm.