Personal Business: REAL ESTATE: LANDLORDS
HOW TO HANDLE THE TENANT FROM HELL
Rudy Matthews remembers his terror when an angry, drunken tenant tried to run him down in a parking lot. This was 10 years ago, back when Matthews, a phys-ed teacher in Tampa, was still learning the ropes of being a landlord. This particular tenant was often irate, especially after receiving an eviction notice. (He owed two months' rent.) One day, as Matthews walked behind the tenant's car, the tenant "lurched it back real quick," forcing the landlord to jump for his life. Matthews went to the police, but the tenant skipped town--without bothering to pay the rent, naturally.
Matthews' experience is hardly unique among America's private landlords, many of whom venture into real estate in pursuit of fat rent checks. But they often fail to plan for nightmare tenants--from raucous partyers and wife-beaters to drug dealers and scam artists trying to live rent-free. The key, landlords agree, is to avoid problem tenants from the get-go--but always without discriminating against fully qualified, would-be renters.
So what to do? Even if it goes against all of your laid-back instincts, work according to the book. Forget about any oral promises: They'll fall flat if you ever have a disagreement. Instead, establish impeccable documentation, including the rental application, the lease or rental agreement, termination notice, and an itemization of security deposits. Then, if you ever land in court--and assume that you will--the papers will support you.
From the first moment, be consistent. This means treating all applicants in the same manner, regardless of age, sex, race, religion, or physical handicap. Never steer tenants to a particular unit because of their age, gender, or family status. Many landlords now require prospective tenants to show ID cards. But remember you may be violating the law if you require an ID from one candidate and not another.
Showing an apartment can be time-consuming, but don't follow the urge to please the first anxious applicant who comes your way. And don't let even the kindliest soul talk you into letting them stay temporarily.
HASSLE. The next step, checking references, is crucial in the application process and can prevent potential nightmares. Many landlords use tenant-screening agencies, costing $10 to $20 per application. The National Association of Screening Agencies (800 462-3033) can help with referrals. But regardless of how you do your checks, be sure to be thorough, going through an applicant's employment, credit, and criminal history. A tenant's previous landlords can be good sources. But you have to watch out for friends posing as landlords. This means verifying property ownership. It's a hassle, but nothing compared with the woes brought on by a problem tenant. You may also want to consult Landlord's Legal Guide by Marcia Stewart, Ralph Warner, and Janet Portman, ($37.50, Nolo Press), which, among other things, provides advice on screening and choosing residents. Another good resource: the Institute for Real Estate Management (800 837-0706, ext. 4405).
Mike Davis of Utopia Rental Connection in Honolulu learned about the value of credit checks the hard way. He recalls a tenant who paid six months up front to rent a furnished condo apartment--and then defaulted in the seventh month. The woman had paid the rent with proceeds from a previous condo sale, Davis says, but had no regular income. Worse, she brought a "cat from hell." Between fleas and clawed furniture, the animal left behind $20,000 in damage. "Never again will I allow a pet in my condos--or ever forget a credit check," Davis vows.
Once you have settled on a new tenant, putting the oral agreement into writing is your greatest protection against any potential problems. Consult your lawyer. Deborah Parker-Hawkins, president of Parker Real Estate Management in Bloomington, Ind., says that this is especially important for those who are planning to rent to groups of students. Draw up a lease, so "if one tenant quits, then the first is responsible for the second," she says. Having a parent co-sign a student's lease is another way to protect yourself.
STINKING FISH. Cultural differences often require a landlord to show flexibility and tact. Dorothy Gourley, an apartment marketing consultant in Mission Viejo, Calif., for example, says she asked Asian tenants to dry their fish heads at a relative's house, rather than on their patios. They complied. And after tenants complained of other residents loitering out front, Gourley set up some seats in the garden of the complex. "You need to convey to the tenant that you appreciate the custom, but that it is not conducive to comfort in the apartment environment," she says.
Some problems, however, resist such gentle persuasion and demand nothing less than the landlord's ultimate weapon: eviction. For Gourley, there was the case of her tenants' disappearing cats. With time, she linked the trouble to a cult worshiper, who was sacrificing the animals in his apartment, then throwing the carcasses outside. Because of unsanitary conditions, "he was endangering the lives of others," she says--not to mention the cats. Easy call: eviction.
But it's not always easy to force out tenants, and laws vary widely by state. For the most part, the days when landlords forced evictions by shutting off the utilities unannounced or tearing a door off its hinges in winter are gone. In almost all states, such practices are illegal. Tenants have a right to remain on the premises until an eviction judgment is rendered, even when they haven't paid rent. This can lead to frustration. In such cases, the Landlord's Legal Guide advises avoiding personal contact with the tenant and certainly steering clear of physical confrontations.
Although getting an eviction generally takes a few weeks, it can be accomplished in 24 hours in some states, such as Colorado and Arizona. If the case is appealed, however, the matter often lasts several weeks or months. Many states are now offering expedited evictions "to afford the landlord the opportunity to get a deadbeat out and rent his property quickly," says Portman. But there's a trade-off: "If you give the landlord the right to go through court quickly, the law insists they do it right." So be sure to know the procedure and do everything properly, down to specific rules. Otherwise, you'll be sure to cause unwanted delay.
SPREADING. The recent surge in personal bankruptcies is one of the most unsettling problems for landlords today, especially in California. There, so-called bankruptcy mills charge a fee to stall evictions with bankruptcy petitions. Nearly 4,000 of these filings occurred in Los Angeles last year, and the trend is spreading eastward. "These people are trying to buy time rather than get a fresh start, which is the purpose of the U.S. Bankruptcy Code," says Clarine Nardi Riddle, a lobbyist at the Multi Housing Council in Washington. Groups such as hers are pushing for bankruptcy-law changes. But don't bank on fast relief.
Although it's tough to recover rent when tenants file for bankruptcy, mastering legal paperwork can boost a landlord's chance of recouping some cash. First, file a proof of claim for overdue rent and to recover the security deposit, advises Glenn Demby, supervising editor of Professional Apartment Management, a legal newsletter (800 643-8095). Then, be sure to bill residents for rent that comes due, even after they file for bankruptcy. The protection does not free tenants of their responsibility to pay rent unless the court grants a discharge, which formally releases the resident from his debts before the bankruptcy. Avoid using the security deposit to offset unpaid rent.
To survive nightmarish tenants, even seasoned landlords must also be sure to keep up with changes in the law. You may want to consult self-help legal guides, or better yet, join a local apartment association. Then, at least, you'll have folks to commiserate with if your tenants' cats start disappearing.By Johanna Knapschaefer EDITED BY EDWARD C. BAIGReturn to top