How to avoid a nightmare tenancy
Whether you have managed rental properties for years or are a new landlord, sooner or later you are going to face the scenario every property owner dreads: the tenant from hell. Horror stories abound about dead animals, fixtures yanked from their fitments, and even (look away now) excreta smeared on walls – a last protest action before eviction. Fortunately these stories make the news due to their sensational nature but are not typical. Far more common is simple failure to pay rent or damage caused to property. The associated loss of income from this misconduct and an unlettable property while repairs are done can cause property owners to lose sleep.
If your dream tenant has turned into your worst nightmare, what actions are available to you and how do you ensure you remain compliant with rental housing legislation while protecting your asset and your interests?
Tactics of the nightmare tenant
While non-payment of rent is not the only behaviour that makes a tenant difficult or undesirable, it is usually the first indication that there is a problem, and often accompanies other unsavoury conduct. There are several tactics a tenant might use to avoid paying rent. It’s important not to fall for them.
- Paying partial rent: A tenant may pay a portion of the rent owed. While they may promise to pay the balance the following month along with that month’s full rent, this is a warning sign and you are unwise to accept it. If you accept partial rent one month, you cannot begin the eviction procedure. The tenant has thus bought time, and in all likelihood will not pay in full the next month. You could reach the end of the lease with a large number of overdue rent payments, but you have forfeited your grounds for eviction. Don’t, whatever the sob story, accept partial payments.
- Paying in cash: This is a tricky one because there is still a portion of South African society that is unbanked. The problem with cash is that it is untraceable and therefore if you take your tenant to court they may claim to have made rental payments they did not make, and you cannot prove otherwise. It is easy to produce a fake receipt. You need to be able to show a record of payments made and clear evidence of the months when rent was not paid. If the tenant does not have a bank account, there are electronic alternatives such as Paypal or other e-wallet services. If cash is the only option, give them a receipt that you both sign at the time and keep a copy for yourself.
- The hardship story: Some tenants will ask for more time to pay rent, accompanied by a tale of woe designed to gain your sympathy. While their situation may be genuine, it is very hard to verify. However much compassion you have for their misfortune, you are not a bank or a charity. If they need a loan, they must approach family, friends, or financial institutions. If the tenant is a friend, this may feel like tough love, but it will make things easier for both of you in the long run.
- The maintenance ruse: A tenant may claim that a property is uninhabitable or in need of maintenance, and withhold rent until the “fault” is addressed. Make sure your lease specifies how maintenance requests are to be made (in writing is best), and then acknowledge every maintenance request, track progress in a system, and provide the tenant with updates. If you respond in a timely manner to written requests for maintenance, the tenant has no grounds for withholding rent.
Prevention is better than cure
Legislation provides landlords with the means to remove nightmare tenants. We cover that in a separate post. But it is better to avoid them in the first place. Tenant screening is a critical aspect of property management and taking shortcuts at this stage may cost you dearly later. Credit checks will tell you about past solvency but they don’t reveal anything about the character of the applicant. Reference checks can be faked, so it’s important to screen the tenant personally and carefully.
Here are some tips to ensure your tenant verification is legitimate:
- Always ask to see their original ID. Photocopies can be forged.
- Verify their employment history. When contacting an employer, call the main office line listed on a website (not a cell phone). If this is not available – some tradespeople work from cell phone numbers as they are moving around all day but are still bona fide employers – ask them to send you an email from their company email as proof of legitimacy.
- Call past landlords. Ask questions such as “can you confirm how much rent the tenant is paying?” This will help determine whether they are a genuine landlord or a friend. If possible, contact the landlord two or three tenancies past. The existing landlords may be keen to get rid of the tenant, and therefore give a good reference! Previous landlords may be more honest since they have no interest in the situation.
- Reference check all adults who will be living in the property, not just the person signing the lease. At the risk of being politically incorrect, it does happen that a woman signs the lease because she is a low-risk tenant but her partner has a history of undesirable behaviour. Be sure to ask the main tenant how many people in total will occupy the property and what their names are. You don’t want your two-bedroom flat turned into a commune.
- Keep a record of your property conditions and tenant interactions. Conduct regular inspections. We mentioned that non-payment of rent is not the only feature of nightmare tenants. Failure to maintain the property in a reasonable condition is also the source of much landlord misery. Frequent inspections will keep the tenants on their toes; it is much easier to keep a place in good order than to undertake a massive clean-up every three months. It will also allow you to spot potential breaches of the lease, e.g. evidence of animals when the lease explicitly forbids pets. If you fail to visit the property regularly you may actually encourage property damage because your tenants aren’t being held accountable.
You don’t have to go it alone
If you want to avoid renting to tenants from hell in future, we can help you screen prospective tenants and draw up a lease contract. Eviction lawyers are now in Johannesburg, Pretoria and Durban, as well as Cape Town. So wherever your property is located, we can help you find your dream tenant and avoid a nightmare.