Deadbeat Tenants
Following through on doing a thorough check of a prospective tenant can seem like a daunting task. But it doesn’t have to be.
You’ve called the current landlord, the employer and the references. They all seemed to bend-over-backwards to tell you what a great person tenant x would be. A little too good if you know what I mean. But how do you find out more? Do you not rent to a potentially great tenant because of a gut feeling you have? To you rent to them only to discover you should have listened to your gut?
There are ways to verify the information given and get more information to base your decision on. In a previous post I mentioned the reverse look up for phone numbers. You can also do this for addresses, cell phones, email address etc.
Don’t over look doing a criminal records search, bankruptcy search, search the sex offender registry. Seems a little overwhelming doesn’t it. Not really, if you know where to go. I have found a really great site Click Here! where everything is all in one place. It saves you a lot of time trying to find the right information.
If you’ve been stuck with a deadbeat tenant you can claim this as a loss on your taxes as long as you can show that you tried to collect the debt.
Be wary of the deadbeat tenant who sends you a letter saying they intend to pay you. In some jurisdictions you can’t get a judgment if you can’t prove they intended to rip you off. The professional tenant will cover themselves here by writing a letter saying they never meant to rip you off and intend to pay you.
Good luck in dealing with and avoiding deadbeat and professional tenants.
Thursday, March 27, 2008
Wednesday, March 26, 2008
Dead Beat Tenants
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.
One product that I’ve found that is extremely useful is the Attorney’s Landlording Kit. It contains all the forms that you need in electronic format, which is great because you can customize them to suit your individual properties. In all there are 27 different customizable forms. At a cost of less than $50.00 it is great investment for the small landlord. Whenever you need one of the forms you just print it off. For more information on this useful product please Click Here!
Subscribe to:
Posts (Atom)