Poorly behaved tenants can make a property manager’s job extremely difficult. Some tenants constantly pay rent late, while others are careless and trash the property. There are steps property managers and agents can take to deal with bad tenants and protect the interests of their landlords.
Most of the time, tenants understand the rules and obligations they have agreed to under their tenancy agreements and they meet their obligations, treating the rental property as if it were their own. However, there are times a landlord and property manager might get stuck with a tenant from hell and be forced to deal with damaged property, nuisance, complaints from the council or other neighbours, and rent arrears.
There have been plenty of reports in the news uncovering horror stories of landlords who have given up and relinquished their properties after being fed up with their prize possessions being trashed and receiving threats from unruly tenants.
Unfortunately, many landlords feel that new rental reform laws have left them with minimal rights, forcing investors to sell their properties and escape the market.
The argument is strong on both sides of the fence, with tenants’ advocates arguing many renters are living in substandard rentals and have a fear of complaining to their landlord due to the risk of being evicted.
From the landlord’s perspective, the fear is that the reforms may become too onerous, forcing them to sell up.
How to manage bad tenants
Step 1: Know the law
Tenants have certain rights that are anointed by law in each territory and state, and the unfortunate truth is that some bad tenants know how to play the eviction game and will utilise the legal framework to prolong the process so that they can remain in their property for as long as possible.
When dealing with a volatile situation where a tenant is no longer fulfilling their responsibilities, it’s crucial to seek the advice of a suitably qualified property lawyer who is familiar with their state or territory’s tenancy laws.
Each territory or state’s residential tenancy legislation includes the following factors:
- Mandates for notifying the tenant that they have contravened the rental agreement
- The time limitation that must be given to a tenant to rectify the breach
- The directives for issuing a notice of termination of the tenancy if the tenant fails to rectify the breach
- The grounds upon which a landlord can cease a tenancy.
Not all tenants and landlords are reasonable and are able to negotiate effectively when a dispute does arise, so it is important to be prepared to oversee disputes and understand when legal advice may be beneficial to resolve the matter quickly and effectively.
Step 2: Get the agreement right
Landlords should always receive appropriate advice when drafting a tenancy agreement to ensure it includes all the relevant conditions required to protect the property and themselves, and make note of what legal remedy will be issued if these conditions are infringed by the tenant.
Conditions that should be clearly outlined in a tenancy agreement include:
- The rental amount payable and how often it must be paid
- The tenants’ responsibility to inform the property owner or property manager of maintenance issues and the process that will follow to rectify these issues
- The tenants’ obligation to pay for any damage other than reasonable ‘wear and tear.’
- A clear definition of what reasonable ‘wear and tear’ is and outlining how any damage by pets or other factors will be treated.
- The tenants’ names and the number of tenants that are approved to reside on the property
- The tenants’ rights and responsibilities concerning visitors and their conduct.
- Any rules that must be followed as indicated by strata regulations for properties located in complexes and buildings.
Ensuring all information and conditions are included in the tenancy agreement at the start of the tenancy will permit a landlord and property manager to refer to the paperwork if the time comes and a tenant breaches the agreement.
When drawing up tenancy agreements, it is always best to obtain legal advice from a property lawyer who can ensure all party’s best interests are protected and any conditions that relate to the specific property and tenants have been considered.
Step 3: Conduct regular inspections
Each state and territory’s tenancy laws stipulate how many routine inspections a landlord or property manager can carry out each year. For example, in New South Wales, a landlord can conduct a maximum of four routine inspections per year, having given the tenant seven days’ notice of the inspection date.
When inspecting a property, there are some critical warning signs that a landlord or property manager can look out for to determine if the tenants are adhering to the terms of the agreement.
Some of the red flags may include:
- If there are more beds or mattresses than the number of tenants listed on the lease
- Noticeable damage to the property
- Unreported maintenance issues
- Uncleanliness and poor upkeep of the property
- Reluctance to allow inspections
- Pets on the property that have not been disclosed or included in the tenancy agreement.
Common grounds to issue a breach notice include cars parked on lawns, torn fly screens, holes in walls, tears or stains on carpets, unauthorised pets and late rental payments. However, it’s essential to know the law when documenting the evidence of a tenant’s bad behaviour to ensure your own compliance.
Step 4: Issue a breach notice
If your tenant has contravened the tenancy agreement terms, then it’s essential to issue a breach notice as quickly as possible, as this is a crucial step in the eviction process. Failure to issue a breach notice, providing the tenant with the timeframe to remedy the breach delineated in the state legislation, means that you will be unable to commence eviction proceedings.
An official breach of notice form must be imparted and delivered in accordance with the relevant legislation in your state or territory. This may involve giving the notice to the tenant personally or mailing it to them. In most cases, the property manager will post the breach notice and must allow adequate time for the notice to be received before the breach timeframe can begin.
Step 5: Issue a notice of termination
If a breach notice is issued and the breach is not remedied within the required timeframe, the subsequent step is to issue a notice of termination to the tenant. The notice will inform the tenant of the grounds for the termination and when they must move out of the premises. In Queensland, the tenant must be granted no less than seven days to move out, if there are un-remedied rent arrears and 14 days for any other un-remedied breach.
The notice to remedy the breach lists where they are paid and the amount of rent, they must pay to rectify the breach. So, if the tenant does not pay that amount by the due date, the property manager can then issue a notice for the tenant to leave the next day. If the tenant is paid up by the cut-off date of the notice to leave, all is forgiven. If not, it’s time to take the process to the next stage.
Step 6: Gaining possession
If all the necessary legal steps are followed and the tenant is still refusing to vacate the premises by the specified date on the notice of termination, you can’t simply throw them out. Instead, you utilise the relevant legal channels to gain authorisation to regain control of the property.
In Queensland, a property manager can solicit the Queensland Civil and Administrative Tribunal (QCAT) for a termination order and a ‘Warrant of Possession’ to end the tenancy. The QCAT application must be made within 14 days of the eviction date specified on the notice of termination.
If you do not apply to QCAT within these 14 days, you must begin the entire process again.
Once issued the police have the power to enforce any warrants of possession issued by QCAT.
It’s also important to understand your state or territory’s regulations when dealing with any property left behind by evicted tenants. You may be required to organise the removal and storage of furniture and any other items remaining in the home.
The removal of the tenant’s property should be at the tenant’s expense, which is where insurance is essential as these types of issues can cost hundreds, if not thousands, of dollars to resolve, and the landlord’s insurance can be depended on in these matters.
Landlord insurance may also be able to be relied on in cases of malicious damage to property. It is important for landlords to check and understand the limits, conditions and exclusions that apply to insurance policies to determine what types of damage are covered. Many policies only cover accidental damage and may not cover damage from malicious intent.
Step 7: Going to court
Not too many tenancy disputes make it to court, but there are instances where unresolved disputes are escalated to the point of litigation.
Common disputes that proceed to court include:
- refusal to return bond money
- overdue rent
- intentional property damage
- poor maintenance of the premises resulting in excessive repair costs
- disputes over ending tenancy agreements.
It’s essential to keep records of your conduct and your tenant’s conduct concerning the tenancy agreement.
If there is damage to the property, photos should be taken at the earliest opportunity.
Most tenancy disputes that make it to court involve non-payment of rent. For example, by the time the tenant has been evicted the weeks of unpaid rent may not be covered by their bond, therefore a landlord may wish to file a compensation claim.
Where there is a dispute over damage to a property that the bond does not cover the cost to repair, the following steps should be taken to resolve the issue:
- Attempt to agree on an outcome between both parties
- If no outcome can be agreed to, the RTA provides a dispute resolution service where a conciliator will make sure both parties understand their rights and obligations and will try to assist the parties to agree to an outcome.
- Where dispute resolution fails, a claim is then lodged with QCAT to hear the dispute and decide.
Attwood Marshall Lawyers – leading property lawyers, supporting agents, landlords and tenants in resolving disputes
Terrible tenants can make your job as a landlord or property manager tough. If a tenant has failed to uphold their responsibilities under a tenancy agreement, or worse, you suspect that a tenant is criminally active within a property, desecrating a property, or being uncooperative making your job impossible, it is imperative to obtain legal advice at the earliest opportunity.
It is always best to ensure tenancy agreement terms and conditions are explained to the lessor or lessee before signing and to encourage landlords to obtain independent advice from a property lawyer if problems arise and a tenancy agreement is in dispute.
If you need property law advice, contact our Property and Commercial Department Manager Jess Kimpton on direct line 07 5506 8214, email firstname.lastname@example.org, or mobile 0432 857 300.
Our offices are located in Coolangatta, Kingscliff, Robina Town Centre, Brisbane, Sydney and Melbourne. If you require our help outside regular business hours, our Robina Town Centre office is also open Thursday nights until 9pm and Saturday mornings until midday.