Disruptive Tenants

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b>The Most Dangerous            single family or commercial
Tenant                      building, their bad behavior can
                                cost you a fortune in legal and
I thought I had checked               other costs.
everything with this prospective
tenant. He had a good report         Many real estate investors start
from his previous landlord. He       with some naïve assumptions about
had worked at the same company        other people. We follow the
for five years. His credit was       rules and treat others with
fine. And he seemed like a           respect, so we think everybody
responsible person.                  else does as well. But if you’re
                                      going to be a successful
But he would turn out to be the       landlord, you must prepare to
worst tenant I ever had. He          deal with the worst of human
drank heavily, insulted and           nature. That means using all the
threatened other tenants, tried       screening tools at your disposal;
to start fights, damaged their        consistently enforcing a clear
property, and even got arrested       set of rules; and knowing what
in my parking lot for being drunk     you will do for any type of
and disorderly and resisting          tenant infraction, as well as the
arrest.                               steps you must follow for a
                                      legal, trouble-free eviction.
There are many different ways to
be a bad tenant, but among the        The best solution to disruptive
worst are disruptive people.          tenants is to keep them out of
Disruptive people, in a               your properties. I believe the
multifamily property, can drive       first step should be to check
all of your good tenants out and      with your local landlords’
permanently damage the reputation     association or REIA, which may
of your building. Even in a          keep a tenant database. After

that you can check credit,            employer’s phone number on your
employment, previous tenancy, and     own – don’t trust the rental
criminal behavior.                    application. In both employment
                                      and previous tenancy checking,
For each step in the process,         watch out. Former supervisors
there’s a right way and a wrong       and landlords often give overly
way. With the tenant database        positive reports.
(and indeed all background
checking steps) make sure that        Make sure you check the same
you’ve got the right person.          things, document your process,
Many good people have suffered        and keep a detailed record for
because someone else with the         each prospect you check out.
same name misbehaved. Also           This system will help if a
remember that tenant databases        rejected prospect ever sues for
often include both good and bad       discrimination.
tenants. Check with the previous
landlord, who submitted your          The only downside to all this
prospect’s name, to find out what     checking is that you will reject
he really thought about the           more prospects than most of the
tenant.                               other landlords in your area, and
                                      your units may stay vacant
Credit and employment are two         longer. But, considering the
areas where you may decide to be      hassle and expense that a bad
flexible. Many otherwise fine        tenant can cause, losing a
people have poor credit. If the      month’s rent doesn’t seem that
tenant has only worked at his job     terrible.
for a short time, talk to his
employers from before that            Once you’ve approved a rental
change. In employment checking,      application and the tenant has
make sure you find out the            moved in, the next step is to get

them started with good habits.        You also must make sure not to
Make clear what you will not          overreact. You may have two
tolerate and give the tenant a        tenants who are both perfectly
detailed list of fines and rules      responsible, but simply do not
that are the same for everybody.      like each other. They might show
Make the list reasonable. An         their dislike by nitpicking about
overly detailed and nitpicky list     each others’ behavior. Or you
will turn off tenants you want to     may have a very demanding tenant
have. In the first few weeks or      who calls you with trivial
months after the new tenants move     complaints about his neighbors.
in, stop by both their apartment      Maybe the neighbor parked her car
and their neighbors’ or call from     a little too close to his.
time to time to make sure             Another couple walks around their
everything is going well.            apartment late at night. The
                                      woman downstairs has a baby who
Fortunately, most of your tenant      cries a lot.
disruptions won’t be that
serious. Most are minor – loud       To evaluate these situations,
noises, improper trash disposal,      talk to both tenants, and also
or parking violations. Where the      talk to anyone else you have
complaints are along these lines,     living in the building. Suppose
let the tenant know he’s getting      Tenant #1 is constantly
complaints and back them up with      complaining about Tenant #2. But
the fines you have set. Some         when you talk to Tenants #3, #4,
tenants don’t even know they’re       and #5, they all think Tenant #2
causing a problem. In any case,      is a fine neighbor. And you know
your response must be firm and        that #3, #4, and #5 are also
fast. If you don’t, the tenants’     responsible people. That makes
behavior will get worse.              it fairly clear that the problem
                                      is very high expectations, not

bad behavior. It’s time to talk      of the premises. That ought to
to the complainer about lowering      cover most disruptive behavior.
her expectations. You don’t want     However, your lease should make
a reputation as a ridiculously        it clear that any of the Big
nitpicky landlord.                   Three disruptive behaviors will
                                      result in immediate eviction (as
But there are three classes of        always, checking with your local
tenant behaviors that you             real estate attorney so that the
absolutely cannot tolerate. The      language is correct).
tenant does NOT get a second
chance if he fights or threatens      No matter how carefully you
other tenants, or engages in any      screen prospects and set and
illegal activity (most likely         enforce rules, you may still
drug abuse or public drinking).       occasionally run into a nightmare
You should immediately begin the      tenant. However, these steps
eviction process, and make sure       will make disruptive tenants much
you have documentation. There’s      rarer, and your landlording
a standard clause in most leases      experience both happier and more
that requires tenants to not          profitable.
interfere with others’ enjoyment

About the Author:

Brendan O’Brien is the founder and president of Property Master Software, a contributing writer to REIP The Rewards® Magazine and an active landlord and real estate investor - pcpropertymaster.com