A Landlord's Experience with the Nightmare Tenant!
I have been a property manager/landlord for over 12 years now and I must say that if you do things right: credit and background check, on-time property repair and maintenance, tenant retention and management it is a very rewarding experience. However, once in a while a nightmare tenant slips through and that's when managers and landlords are put to the challenge. And as I look back at my dealings with this particular tenant there were a few things I could of done differently to avoid the nightmare or this tenant all together.
Application Process: Mistake #1
As with most of my renters, this tenant which we will call Jane, was referred by a current renter. As it was a referral from a very respectable tenant, I let my guard down, mistake number 1. As with all tenants that rent from me they must complete an application. The application checks for credit, evictions, criminal history, employment and rental history. Having an evictions and or criminal history automatically disqualifies them. My general rule is between credit, employment and rental history, they must two good categories out of the three "2 of 3". For example, if they have bad credit they must have an excellent employment and rental referral showing that they are able to afford rent and put paying rent on the top of their priority.
Because Jane was a referral from a very good tenant, I did not follow my own rule of "2 of 3." Jane had bad credit and she did not provide a verifiable rental reference. She stated that her last landlord was a slumlord and she got out of the apartment on bad terms, RED FLAG!! So only going by her word on the rental reference and her employment I rented to her.
Not sticking to your guns with lease rules: Mistake #2
The first part of Jane's tenancy was uneventful, as she paid her rent on time and was not at all a problem tenant. Seems like a tenant you would like to keep around. Some time during her tenancy she moved in her relatives (not on the lease). I knew she had unauthorized people living with her but because they were not bothering other tenants and rent was being paid I looked the other way.
One day she just picked up and left, but her relatives continued to live at the unit. I tried every which way to resolve the issue but Jane was nowhere to be found. I tried to officially rent the unit to her relatives but noticed there was quite a bit of damage so I was going keep the apartment in Jane's name because she was originally the lease holder and I still had her deposit. But instead of starting an eviction for her relatives I continued to rent to them in hopes that Jane will show back up one day and we could straighten things out. Plus they continued paying the rent.
As you can probably tell, things were starting to get away from me. I was not sticking to my guns and being professional. The right thing to do would be to write a letter addressed to Jane and send it to her last known address (her unit) describing the lease terms that she was violating such as unauthorized occupancy, and possibly vacating without notice. That way it would've been well documented that I did not have some agreement with her to switch the lease to her relatives, which is what she is now claiming in court trying to get her deposit back.
At the time I was more concerned that the rent was being paid and I did not have to fork over an additional $1000 dollars for an eviction should it come to that. I would later regret this, although legally she is bound by the original lease and without a written agreement between the two of us things remained status quo. However her argument is that because I accepted rent from her relatives for a couple of months it was a De facto rental agreement between the relatives and the apartment.
Jane's stove during an inspection after the Human Rights Complaint
Mr. Nice guy: Mistake #3
A couple of months passed since Jane left the apartments. One day I get a call from Jane stating that she wants to move back into the apartments. I asked her why she had just picked up and left without proper notice she said she had a family emergency. A death in the family back in Mexico. She is now back but her husband stayed back in Mexico so now she is a single mother with very limited income and renting anywhere else was too difficult. Against my better judgement, not only did I not not rent to her again, I gave her a newly turned over unit instead making the only option to her, her old unit that was by now trashed with her relatives still living there.
Mistake #3, I thought she could see the value in what I was doing for her, but instead only two months into her tenancy at the new unit, she called and said she wanted out of the lease because her sister was getting a place and she wanted to room with her sister. At this point I was fed with her, after all I have put up with and done for her I told her that she had a 12 month lease and not only will she forfeit her deposit, but she could be liable for the months that I could not get the unit rented.
In a short time after that conversation I get a call from the health department with a complaint for rodent infestation. I have never in 12 years ever been contacted by the health department about anything and here I am getting a complaint about rodents and that I refused to do anything about it. I asked the person at the health department who made the complaint and they refused to tell me due to confidentiality. After finding out it was Jane's unit we immediately the next day took care of the problem. We took some pictures of her kitchen and it was disgusting, it was no wonder she had rats. I never heard from the health department after that.
A few more weeks later I get a call from the Human Rights Commission. There was a complaint from Jane that I was a racist!! That I would only repair the units of Caucasians and not those of Mexican nationals, one of the complaints was rats.....It was mind boggling the amount of evidence I had to provide the Human Rights commission that I was not a racist vs. the zero amount of evidence that she had that I was. The apartment consisted of over 75% Hispanic residency and I was able to prove my case, and later the Human Rights Commission found no evidence I was a racist. The whole ordeal took a tremendous toll on me both emotionally and the time I had to commit to prove my innocence.
Having failed in her complaints to the Health Department and Human Rights she moved out anyway and I thought that would be the end to this nightmare...boy was I wrong. I followed all procedures of a move out and sent her a deposit disbursement disclosure within 14 days (WA). Other than the disclosure of the deposit which she was not getting back because she broke the lease, I never went after her for the monies she still owed the apartment figuring even If I do get a judgement from her she didn't have money to pay anyway.
A couple months after she moved out I get a certified letter that I was being taken to small claims court for her deposit and rent. I am optimistic that I will win in court because at the mandatory mediation meeting she was practically struck down at every one of her claims as to why she deserves her deposit and rent. As for what she owes the apartment the mediator and later the judge simply asked me if I had all the documents supporting my position in which I do. The hearing date is set for June 2011. Keeping my fingers crossed and I will report back the outcome.
Update on the small claims court
We had our day in court and she was completely unprepared. The judge shot her down on just about everything she complained about. Not only did she not win, my counterclaim was awarded. Thank goodness this is over!!
Looking back there were a number of things I could of done to avoid the whole situation. First stick to rule of "2 of 3" in the application process no exceptions. I understand that there are some bad landlords out there but it should be a red flag when a tenant complains about their past landlords. Be extra diligent in getting to the truth about rental references.
Always Always put things in writing. It keeps a paper trail of your position to the lease terms and apartment rules, even if its your right whether or not to enforce your benefits of the lease and choose not to such as collecting late fees etc. But keep in mind that it is best to always stay professional and enforce the rules fairly across the board otherwise someone might mistakingly accuse you of discrimination. I always use this as a great point when enforcing rules, I tell them that I would otherwise not be so strict but it eliminates the perception of favoritism amongst applicants and tenants.
Lastly, no good deed goes unpunished. Most landlords out there have a kind heart, which is why many of them get into trouble with their tenants. From my 12 years of experience, tenants appreciate consistency and professionalism of a good property manager because it translates to professional and timely upkeep of the property and not to mention good neighbors that had to pass the same strict application process. I'm not saying hit everybody up with late fees if they are one day late, but if you are going to give your tenants a grace period make sure you set up guidelines for yourself which apply to all your tenants and put it in writing when someone is late and why you are allowing them a grace period.