How to Deal with Bad Tenants: 13 Common Issues
When a tenant signs a lease, you expect them to adhere to the terms that it contains. Though this is a reasonable expectation, unfortunately, it doesn’t always work out this way.
There is no singular definition for a bad tenant. There are numerous separate issues that are guaranteed to cause you headaches. Those range from late rent payments to secret pets.
Check out this comprehensive breakdown of the common scenarios that can turn a tenant into a nightmare. No worries, we’ve got you covered with the best solutions and proactive measures to help prevent these problems.
Here are the top 13 common problems property managers face and how to solve them.
1. Habitual Late Payment of Rent
One instance of lateness isn’t enough to ring the alarm bells. However, a tenant who continually fails to meet your deadlines needs to be held accountable.
Most often, late payment is the result of a shortage of cash. A common and useful way to solve this is by occasionally accepting partial payment from a tenant. If your tenant relies on weekly paychecks, a weekly payment structure may work well for them as well.
If adjusting the payment structure doesn’t address the root of the tenant’s lateness, consider implementing late fees in your next lease agreement.
Often, this financial penalty will kick forgetful tenants into gear. It can help get them into the habit of paying on time.
If the tenant simply cannot afford the monthly rent, see if you can help them by finding them a roommate. Or, maybe you have another unit you own that’s cheaper.
Such active measures may seem too out of your way. However, a bit of compassion during a time of financial duress and a willingness to offer solutions can earn you loyal, long-term tenants.
Be sure to include any late rent payment fees that you will charge in your lease agreement. This ensures that your tenant is aware of the consequences of late rent payments and they’re motivated to pay on time.
Consider getting a rent default insurance policy. These policies can be a lifeline for landlords and property managers who deal with tenants who don’t pay their rent on time. These policies pay the amount of the tenant’s rent and protect landlords’ income.
2. Tenant Disrupting Neighbors
Regardless of how thorough your vetting process is, you can’t always predict how a tenant will treat his/her neighbors. When a tenant disturbs the daily life of other tenants in the unit or building, there’s a problem on your hands that can reach a boiling point if you don’t do anything to intervene.
It’s good to mention the right course of action within the lease itself for issues among tenants. In the event that you do need to step in, you should have a process to deal with the tenant.
Typically, you’ll issue a warning first. The next steps are fines and eviction following a continued breach of the covenant of quiet enjoyment.
Weeding out potential disruptive tenants isn’t something you can perfect. However, a thorough vetting process can help when you are considering applicants. Additionally, consider the current living standards of the unit you’re seeking to fill.
Are they entering a generally quiet building? Or is it already occupied by tenants who don’t mind a bit of loudness at night? Evaluating such realities may help you determine who would match the current culture within the unit or building.
Tenants are also free to mediate among themselves. Most will try that course of action before bringing you in. Ensure that your tenants know how to deal with noisy neighbors without your help. Provide them with information on the subject.
3. Illegal Tenants (or “Secret Subletters”)
Sometimes landlords may face a case of “secret subletting.” That’s when the legal tenant has rented out a room or the entire unit to another person or group without informing their landlord.
Protect yourself by including an exclusivity clause in the lease. Such a clause communicates that the legal tenant is the only one who can legally occupy the building. It also communicates that other individuals who are not named on the lease may not move in.
If you don’t necessarily find subletting a problem, communicate this in the lease and verbally Let tenants know that if they want to sublet, they must communicate that to you.
If you’re willing to consider a tenant who the current legal tenant found, ask for a meeting with that person. Subject them to the same screening process you use for all tenants.
Often, tenants sublet in situations where they need to suddenly relocate. Or, they may have fallen into financial insecurity.
It can be difficult to prepare for these situations. However, you can protect yourself by including terms in the lease that details your subletting rules.
You must also be informed of any subletting laws in your state. Some states restrict a landlord’s ability to ban illegal tenants.
4. Severe Property Damage
There is a significant difference between normal wear and tear and purposeful property damage. Tenants can leave landlords with high repair costs after extensive property damage.
Once you become aware of the damage, do a thorough analysis of the repairs needed and the estimated cost. Be sure to record an itemized list of these costs for any deductions to their security deposit. Ensure that the tenant directly caused the damage (rather than a natural disaster, flooding, etc.).
Communicate to them verbally and in writing that these funds are needed to repair the damage. Sometimes a tenant will refuse to pay. In that case, you may need to take the matter to court.
Visual evidence is your friend. Before a tenant moves in, take pictures (with timestamps!) of all the rooms, appliances, walls, ceilings, floors, etc. of the unit.
Repeat this process once the tenant moves out. If the damage requires legal proceedings, you have solid evidence to make your case.
Acquire property insurance that is geared towards landlords. Such an insurance policy should cover you from liability when the property is leased. It should also cover damage to any aspects of the unit that the tenants inflicted.
5. Unpaid Utilities
Rent isn’t the only payment that tenants need to make. Gas and water aren’t free and can be turned off if the bill isn’t paid in a timely manner.
The solution depends on the agreement that you and the tenant made in the lease. Are utilities in your name, paid by the tenant monthly to you?
Legally, a tenant who has moved out won’t be tracked down by a utility company. If the services are in your name, you’re responsible.
If the utilities are in the tenant’s name, you won’t be dealing with past-due bills. The utility company will search and seek to contact the tenant directly to resolve the matter.
Be ahead of the issue by including clauses pertaining to utilities in the lease. Bolster up your ability to intervene by detailing the consequences of not paying utilities on time.
You can introduce a late fee structure if the utilities are in your name. You can even list non-payment of utility charges as a cause for eviction.
6. Illegal Use of Premises
If you find out that a tenant is living in the unit, but also conducting an illegal business within it, intervening is crucial. Your tenant may be selling drugs or manufacturing illegal materials within the home.
If your tenants are doing anything illegal, it can lead to serious legal and liability issues for you. Seek counsel to effectively resolve the issue without any form of liability on your hands for the criminal conduct of your tenant.
A lawyer will advise you on your options and whether you stand to be charged. You should call the police about any violent and potentially dangerous activities that you are aware of on your property.
When you are screening applicants, run a background check on all of them. This may reveal prior criminal history among other legal run-ins. That can help to inform you about the individual’s conduct. However, keep in mind that it’s illegal to discriminate against prospective tenants with a criminal history.
Contact previous landlords from whom the individual has rented. Getting first-hand testimonials from people who have had experience with the applicant will give you valuable insights.
7. Broken In-Unit Appliances
Whether the washer ceases to wash or the fridge is no longer capable of cooling, the manner in which you should handle broken appliances depends heavily on the language in your lease.
Legally, you have responsibility for the repair and upkeep of appliances that come with the property (which the lease must also state).
If an appliance is broken and you have assumed responsibility for it in your lease agreement, then you must pay for its repair or replacement. However, you can adjust the language to include that the tenant is responsible for replacing a broken appliance.
Never rent out a unit with known broken appliances. Before a new tenant moves in, it’s crucial that your appliances are all working.
If you welcome a new tenant with a defective dryer, it’s within their rights to file a claim with the court if you refuse to repair or replace the items.
8. Pest Issues
Uh oh — a tenant has spotted signs of a pest infestation.
Hire an exterminator immediately once a tenant notifies you of this complaint. Pests can spread easily. They can pose a danger to any families that you’re housing.
Instead of waiting for the problem to occur, invest in an exterminator on a regular basis as a preventative measure. Yearly or quarterly check-ups are typically enough to avoid a full-blown pest infestation.
9. Security Deposit Disputes
You may need to withhold some or all of the tenant’s security deposit to cover repairs to their unit. They may disagree with that.
Create an itemized list of repairs and their costs to provide your tenants with. Be sure to supply them with pictures that clearly show the damage that occurred during your tenant’s stay.
You’ll need to have time-stamped pictures of before and after your tenant moved in to prove your case in the event that they take you to court.
In addition to having a conversation with your tenant about the purpose of the security deposit, send reminder emails as the lease’s end-date nears closer. That’ll help you to ensure the tenant understands they owe you rent for that last month.
10. Secret Pets & Pet Damage
Your lease may have a non-negotiable no-pet policy. However, sometimes people shrug it off and add a dog or cat to their household anyway.
There are good reasons for a no-pet policy. Odors can permeate the structure and animals can cause other kinds of damage.
If you discover an illegal pet is living on the premises, you need to contact the tenant and schedule a meeting. If you’re willing to budge on the pet issue, you don’t need to walk away without anything.
Discuss an updated lease with your tenant. That could include a pet deposit, pet rent, or pet fee. You may also require your tenant to get pet liability insurance.
Property damage, however, should be fully left in the tenant’s liability. You don’t have to tolerate this violation, either. An unwelcome pet can be grounds for eviction.
Discuss your pet policy in detail with the tenant. If you’re willing to consider a pet for an added-on fee, state that as well. Make sure to state it both verbally and within the lease.
This gives the tenant a legal way to approach the scenario. It may also prevent them from illegally throwing a pet in the mix.
11. Illegal Parking and Violations
When a tenant is parking where they are not supposed to, this can cause issues for neighbors or other tenants within the unit.
Communicate with your tenant. Offer them alternative ideas for parking, such as nearby garages.
If your tenant has been causing parking woes for other tenants, introduce a parking violation fee for every occurrence. You may need to have your tenant sign an updated lease if this wasn’t already in the lease agreement.
To avoid any problems with parking altogether, identify parking spots for all tenants before they sign the lease. Specify within the lease where they and potential guests are to park on the property. Ensure that you have a parking violation fee in your lease agreement.
12. Other Various Lease Violations
Not all tenants will adhere to every lease term. However, these terms are there for a reason. It can cause problems for property managers if tenants don’t follow them.
Deliver a notice to quit to the tenant. Such letters have legal weight. They may help your case should the tenant’s violations result in an eviction. You should send a notice to quit or notice of lease violation via certified mail.
Following up by email or phone to ensure the tenant has received the communication is the next step. Such a letter will show the tenant that you are serious. It’ll convey that inaction on their end will result in the termination of your agreement.
Plan ahead of time, that’s what leases are for. Indicate the consequences of lease violations.
Reserve your right to act upon any such transgressions swiftly and with the law on your side.
Consult with your local real estate statutes. Make sure you’re operating lawfully and taking the appropriate steps that’ll protect you in court.
13. High Turnover Rates
Are you struggling with high tenant turnover? If you can’t keep a tenant for the duration of their lease term, you have a major issue.
When there are issues with the structure or function of the property that the tenant brings to your attention, act quickly and comprehensively. Hire repair companies that deliver good service. Give your tenants an easy way to report any maintenance issues via mail or email.
Additionally, you may need to revamp your tenant screening process. If you’re consistently getting tenants who don’t finish out their lease term, need to be evicted, or simply stop paying rent, then you need to make a change.
When a tenant moves out, take a good look at the unit. Repair all aspects that need fixing. If that isn’t the issue, but the unit is outdated in many respects, invest in upgrades that can elevate the interest in the unit.
You’ll also want to look at the average rent in the area surrounding the property. Are you competitive enough?
Another good habit is to start negotiating the renewal of the lease well ahead of time. Consider offering a discount or other incentive for the tenant to rent.
Final Solution: Eviction
When it comes to bad tenants, sometimes, despite all the proactive measures and solutions you try to implement, an eviction is inevitable. Evictions usually fall into two categories:
- A financial violation: Failure to pay rent or other fees.
- A material violation: Breach of a clause in the lease agreement.
Depending on the violation, and local and state laws, you may have to send a notice to quit or notice of lease violation prior to issuing a formal eviction notice. This is often the case even if you have a valid, legal reason for eviction.
If your tenant doesn’t comply with the above notice, you may begin the formal eviction process. A written eviction notice is the first and necessary step in the eviction process.
After the notice is delivered, the eviction process proceeds as follows:
- File your eviction with a local civil court
- Seek legal counsel and legally evict the tenant via court case
- Evict the tenant
- Collect all past-due rent and other fees the tenant owes
Problematic tenants cause headaches. While it may be your desire to perform a self-help eviction, you should refrain from doing so.
You need to be in compliance with any state and local laws in your area. You’ll need to do that to ensure that you aren’t held liable for any disputes or hit with fines.
If you’re ready to start formal eviction proceedings, don’t go down this path alone. Hire legal counsel to consult you.
When landlords take matters into their own hands (also known as “self-help” evictions), they have no legal leg to stand on should the tenant escalate matters. Repossessing the property without a court order could leave you swimming in murky waters.
Unfortunately, landlords are bound to their current lease agreements. So, unless you get your tenants to sign an updated lease agreement that addresses any issues that you’ve run into during the course of your current lease, you may be stuck.
That’s why it’s important to be prepared. Your lease agreement should address as many eventualities as possible!