Dealing with difficult tenants

Landlords these days also take risks when renting out property.

A while back, I wrote of the plight of tenants who are sometimes shortchanged on account of security of tenure. In many ways, a tenant may have settled himself in when the landlord tells him the tenancy can no longer be further continued.

For a tenant who is running a business, he may have just established himself and created goodwill for the business when he is asked to move and he would need to start all over again.

For a family man, he may have enrolled his children in a nearby school, arranged for tuition in the vicinity and made arrangements for himself to go to work.

Moving to new premises means many changes.

Of course, all this is part of being a tenant. A tenant must always be aware of his status as such.

In many such situations, it may appear unfair to the tenant especially when the tenant holds over because he cannot find another suitable premises and ends up paying double rent.

To a tenant who pays a monthly rental, it may appear that the landlord’s position is a pleasant one of just collecting rental every month and doing little else.

However, the position of a landlord is not always an easy and pleasant one.

In fact, after my previous article on the challenges faced by a tenant, a reader wrote in to describe the plight of landlords with tenants who fail to pay the rent or damage the premises, creating problems for the owner.

Not all landlords and tenants enjoy a cordial relationship. The most common problem is the collection and payment of rent.

In small towns or where the rented premises are nearby, the landlord can easily walk or drive over to collect the rent or to remind the tenant that it is due.

In larger cities, however, collecting rental where the tenant is not reliable and sincere can be a problem. Driving over to collect the rental or to remind the tenant may be costly.

Furthermore, the tenant may not even be in when the landlord visits.

At the end of the day, the cost of travel and time may well diminish the effective rental collected. This, of course, cannot be the objective of renting out premises.

In other cases, a tenant in the beginning stage comes with cash to pay the deposit and the initial rental and then suggests that he would in future pay the amount into the landlord’s bank account.

Initially, this may appear to be a suitable arrangement that would be convenient for both parties. However, it often transpires that when the landlord checks his account, the money is not there.

Furthermore, the landlord will need to ascertain that the sum banked in is from the tenant because there may be a similar amount banked in by another party.

Here again, cooperation is required from the tenant to send the bank-in slip or other evidence of payment, and this may not always be forthcoming.

The tenant may say he has banked in the amount but the landlord may not find it in his account. This is of no use to the landlord who wants to have the money in his account and does not want to be entangled in communications as to whether the money was banked in or not.

This is why many landlords today require tenants to give postdated cheques to cover a six-month or even a one-year period.

In this way, the landlord does not have to chase the tenant to collect the rental. As and when the due date arrives, and according to the date of the cheque, the same is banked in.

If the cheque bounces, there will also be consequences for the tenant. At the same time, there will be clear and reliable evidence that the tenant has defaulted in payment of rent if the cheque is not cleared.

This will come in useful if and when legal action is filed to recover the rent.

Where the tenant is in default of payment of the rental, what can the landlord do?

The only option is to take legal action to recover the rental as well as the premises if the tenant is still in occupation.

At the same time, a claim can be made to recover the cost of any repairs due to damage caused by the tenant.

Quite apart from the fact that taking legal action has its disadvantages and inconveniences, it may be difficult to locate the tenant who has already vacated the premises.

In many cases, the address the tenant may have given and which may even appear on his identity card could very well be the address for the last premises he rented.

Therefore, even if a summons is filed, there will be difficulty in serving it on the tenant, which is a prior step to move on with legal action. In this connection, it will be useful to have pre-agreed in the tenancy agreement how or where the summons may be served – by registered post or by leaving it at the premises referred to.

It would also be desirable to know exactly where and for what organisation the tenant works.

This is to facilitate locating him once he leaves the rented premises. But this again is no guarantee that one will always be able to reach a tenant or former tenant because he may change his job when he changes his residence.

In the present scenario, especially in parts of the country where mobility of individuals is high and frequent, there are further safeguards which landlords will want to explore.

This could include doing a credit check on the tenant or asking an acceptable third party to be a guarantor.

Of course, engaging in all this may appear to be troublesome to some people for just renting out a property.

The idea is to do all that can be done to ensure what is due is collected or to have a loose arrangement where recourse to an effective remedy may not be available.

Given all the hassle that may be perceived to exist in the renting out of a property, the owner may prefer to just leave it vacant and wait for the value to appreciate!

Any comments or suggestions for points of discussion can be sent to The views expressed here are entirely the writer’s own. - By Bhag Singh (The Star)

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