Enough Is Enough
January 1, 2006
Here’s a New Years Resolution you may not have thought about. Create Rental Policies and Standards for existing tenants, based on the property and the type of tenants it usually attracts. Then you’ll know for sure when it’s time to keep one or give one the boot.
How do you know when it’s time to get rid of a tenant? Obvious motivations are dealing drugs, tearing up the unit, and not paying the rent for three months and refusing to answer the phone. Those are easy ones.
Somewhere along the continuum from the ideal tenant who pays the rent on time, takes pride in his or her home, and is a good neighbor to the opposite end is the spot where you say “enough is enough.” Where that spot is, the line that a bad tenant has crossed, is different for every landlord, every property and every market. But there is a clearly defined spot. Do you know where it is for you? How would you know?
If you have rental standards that applicants must meet before they can be considered for tenancy, that is a good place to start looking for criteria as to when a tenant has earned booting out. Would you accept an applicant whose previous landlord reported that he or she had been late with the rent three times in a year? Would you accept an applicant whose previous landlord reported that he had harassed other tenants? Would you accept a tenant whose previous landlord reported she had wild parties every weekend?
Maybe number of times late with the rent is a good criterion to start with for your decision as to booting out time. Likewise with harassing and disturbing neighbors.
Some leases contain a clause that specifies under what circumstances the lease will not be renewed. A deciding factor may be something such as being late with the rent three out of 12 months or having had x number of complaints for rule violations. Those are specific and measurable. Can we do the same thing with existing month-to-month tenants or tenants who don’t have such a clause in their leases? Absolutely. We simply have to decide when enough will be enough.
What happens all too often, and I get emails asking the question regularly from landlords, is that they do not know what to do about a tenant who pays the rent late, when he pays it at all, or who intimidates other tenants or neighbors. I can’t tell them what to do, partly because I don’t know the whole story, only the parts they wrote. There’s always more to tell. And I don’t know the market or personal situation the landlord and property are in. All I can suggest is what they can do, not what they should do.
Often the deciding factor for landlords is “I need the rent.” A known quantity is often preferable to one we do not or cannot know. So they let a bad tenant stay, hoping he or she will mend his or her ways. Sure, that will happen. The fact is, the rent is not being paid. Or it is being paid so late that they have to float the mortgage payment until the rent finally does trickle in.
Time to do some calculations. If you are not getting any rent at all, there is absolutely no point in keeping the tenant. It is cheaper to have a vacant unit than one occupied by a nonpaying tenant, due to the wear, tear and stress (yours). Even if the unit sits vacant for three months, you are better off than if the bad tenant was living there. The damage is stopped and you had to take the mortgage payment out of your pocket, anyway.
If the rent is late every month, or comes in fits and starts, could you do better than that by booting the tenant and looking for a good one? That depends on the current market and the property itself. Only the owner of the property knows.
So how about that New Year’s Resolution? It could even be a February or March resolution. Anytime we do something to take more control of our investments is a good time. When is enough enough?