Dealing With Problem Tenants

Owning a rental property is a great way to get ahead in today’s financially unstable world. One can buy a property with a very minimal down payment when compared to the total value of the asset that you will be renting out, well selected rental property will generate a positive degree of regular cash flow, and with each monthly mortgage payment the principal balance of the total mortgage debt decreases. Over the 30 or so years that I have been in the business I've seen many fortunes made from persons buying one or more rental properties, and numerous statistics seem to support the stance that the gross majority of high net worth persons own some form of investment real estate.

So, whats the problem? In order for the system to work properly good, responsible, paying tenants are required and this often scares inexperienced landlords away. Unfortunately, it seems that you will never be able to enjoy good tenants all the time. Tenants cause grief to their landlords in an infinite number of ways, but usually these issues can be derived to one of the following: 1. Your tenant won't pay their rent and 2. Your tenant is damaging your property. It's been my experience that most good, "strictly business" minded landlords won't care about the majority of other issues that arise from tenancy issues outside of these two points.

The first piece of advise I can offer is this, "Don't call a Lawyer". This may seem strange coming from the owner of a large property management firm like myself who has an in house lawyer on payroll. Having hired lawyers in the past to evict bad tenants has almost always provided our firm with bad value. Legal fees are almost always high enough that the cost of the fees will be higher than the amount of the judgment you will be able to get from the tenant and, in general, evictions are simple and most firms will instinctively arrange for an inexperienced or student lawyer handle your file. For $3500 this seems ridiculous, but there is no shortage of such files for law firms and as such, they tend to focus on larger more lucrative files.

For the rest of this article, I'll outline the steps you will need to take to rid yourself of a problem tenant.

The first and most important step is to provide a good, concise, written notice to the tenant in a timely manor. This will explain to the tenant, in no uncertain terms, what is expected of them. A notice can advise the tenant that you will be expecting them to leave should they not provide some specific performance, like paying the rent or ceasing to damage the property. Another benefit is that these notices can be documented in a file so you will have a good set of chronological history relating to the tenancy.

Under most tenancy legislation, the notice itself will terminate the tenancy or grant you the right to collect the money owing. This however, may not happened because the tenant refuses, which leads us to the next step: going to court. This step is the most daunting to new landlords but can be quick and easy if you are organized. Basically, you will have to go to your local court house and file an application to go before a judge and ask them for a court order to enforce the demands of your original notice. When appearing before a judge be sure to dress as professionally as you can, be organized in your statements, and refrain from any emotional outbursts. Most of all, remember that the judges will know that your are nervous and will most likely be more understanding of your predicament than that of a lawyer or court agent making the same appearance.

Once you have obtained your judgment, you may be required to contact a civil enforcement agency to evict the tenant. Licensed firms can easily be found in the phone book, hiring one of these firms is well worth the effort.