Taming the terrible tenant (Part 4)

By Joel Persinger
YourRealEstateDude.com

It may seem like a cynical statement, but it has been my experience that human nature has an irritating tendency to rear its ugly head in the form of emotional attachment at just the right moment to cause disaster in a business relationship. The relationship between a landlord and tenant is by no means immune to this phenomenon. Landlords will go to all the effort to screen the prospect completely and get an excellent lease signed ahead of time only to let the tenant get away with murder at some later date simply because they’ve become friends or the landlord doesn’t want to stir up additional trouble. What some landlords don’t seem to realize is that once the tenant has gotten away with causing problems without reaping consequences, the problems, in all likelihood, will get steadily worse.

The simplest and most effective way to avoid such situations is to remember that the relationship between landlord and tenant is based upon a mutually beneficial business foundation. The tenant benefits by having the use of the property in a leasehold estate and the landlord benefits by receiving payment in the form of rent. Once we take the position that the relationship is based upon a business footing, it is easier to keep an arms length “friendly, but not friends” approach to the deal. This is best done by using the lease as the cornerstone on which the relationship is built.

Since a lease agreement is essentially a legal document which spells out the responsibilities and obligations of both the tenant and the landlord, it is essentially the document which defines the relationship. I wish I had such a defining document that covered the relationship I have with my kids. They are constantly testing the outer edges of my resolve, looking for loopholes that will allow them to get what they want without paying the price. If you have kids, I’ll bet you have had a similar experience. Here’s a wakeup call for you: tenants are no different! They will take every opportunity to chip away at the limits of the lease. As the old saying goes, “if you give an inch, they’ll take a mile.”

This past year my wife and I rented a home we own to a young lady with her children. She came with glowing recommendations, passed the screening process with flying colors, had an excellent job and seemed like the perfect tenant. She paid her first month’s rent in advance as require along with her deposit and everything seemed right with the world. Then the first of the next month arrived with no rent check. By the sixth of the month I was sending her a three day notice to pay rent or quit. She paid the rent the next day and asked me to waive the $50.00 late fee. I said, “No, we do not waive late fees,” and mailed her rent check back to her because it did not include the late fee. She was absolutely beside herself and scrambled to send us a cashier’s check by “next day air” in order to avoid the eviction proceedings we intended to begin at the end of the three days’ notice.

Over the six months that followed I heard every excuse imaginable to explain why she was late with her rent. Each time I sent a three day notice right on time and required her to pay the late fee. After six months I told my wife, “I hope she pays late again, I’m getting to like receiving the extra fifty bucks.” But, after six months of testing my resolve and $300 in late fees, she finally gave up and paid her rent on time. She still does.

This is but one example, but the moral of the story is the same in every case. Stick to the terms of the lease no matter how compelling the sob story or how challenging it may be for you to do so. Tenants will do their best to take advantage of you. If you let them, your life as a property owner will be a misery. If you hold them to the lease, the majority of your tenants will eventually get tired of suffering the consequences and either move or abide by the lease terms voluntarily.