How to deal with troublesome tenants

While the vast majority of residential tenancies run smoothly, dealing with difficult tenants can be an occasional unpleasant fact of life for property investors.

Whether it’s constantly paying rent late or refusing entry for things like regular inspections, troublesome tenants can be a headache for private landlords and property managers alike.

Shannyn Laird, operations manager at property management start-up, Different, says like in all consumer-facing industries, there can be “tricky cases” when it comes to tenants.

“I’ve seen tenants withhold rent with the aim to force landlords to carry out non-urgent maintenance or property upgrades, the failure to pay rent on-time consistently and even refusing property access for activities like routine inspections, sales valuations or open homes,” she says.

When dealing with a difficult tenant, Laird says to avoid communicating by email.

“I’ve found it’s best to have conversations aimed at resolving difficult cases with tenants over the phone, rather than going back and forth over email. It avoids any potential misunderstanding and usually gets to a positive end result sooner.”

Here Laird shares a step-by-step approach for handling problematic tenants.

1. Acknowledge

Laird says the first thing to do is identify what’s happening.

“Acknowledge the tenant’s concerns and position and ensure their point of view is respected and understood,” she says.

“It’s important to be empathetic, but you also need to rely on facts, rather than emotions.”

2. Repeat

After taking careful notes, the next step is to “repeat a tenant’s expectations back to them” to ensure both parties are aligned, Laird added.

3. Review

The next step involves carefully reviewing the relevant legislation related to the issue, to work out what rights and responsibilities each party has.

Each state and territory has its own residential tenancy legislation, so what is and isn’t allowed can differ depending on where the property is located.

“For example, situations can arise if tenants are unwilling to co-operate with providing access to the property for activities like routine inspections,” Laird says.

Each state and territory’s residential tenancies laws will outline what a landlord can and can’t expect in such a situation.

4. Relay

Next, relay all the facts back to the tenant – and the landlord, if a property manager is working on the landlord’s behalf – with the intention of coming to a reasonable agreement, Laird advises.

5. Record and ratify

“Once an agreement has been made, it is confirmed in writing,” Laird says, that way everyone knows what has been agreed to and the timeframes around any arrangements.

6. Resolve

The final step is the resolution.

“We ensure we follow through on the agreement and action it as quickly as possible,” Laird suggests.

7. What options does a landlord have?

While it’s always best to reach an amicable agreement, if a problem persists, property managers and landlords have options. They include issuing a breach notice for non-payment of rent or damages, a notice to vacate or a termination of the tenancy agreement.

“For more serious issues, there is also the option to lodge an application to relevant authorities to terminate a lease. Sometimes we’d also bring in a mediator to resolve the dispute,” Laird says.

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