How to identify predatory tenants

Landlords can avoid costly mistakes using this thorough screening process
Wednesday, February 11, 2015
Ike J. Awgu, B.A., J.D.

When it comes to landlord and tenant problems, lawyers have seen it all. But despite the gamut of issues that can arise in this relationship, one thing seems to be consistently at the heart of all struggles: the type of tenant landlords are seeking to evict.

During the length of a career, all landlords are likely to experience one or two minor tenant issues—late payment of rent, damage to the property—but the most severe problems, the kind of problems that put landlords out of business, into bankruptcy or financial ruin, are usually caused by what’s known as “predatory tenants.” These are the tenants who repeatedly jump from weak landlord to weak landlord, taking full advantage of an imperfect legal system to remain afloat, resulting in ruined lives and damaged incomes for property owners.

We’ve all heard the stories and read about them in the newspapers. Here’s how to avoid letting a predatory tenant slip through your front door.

1. Check references thoroughly

Predatory tenants are going to provide prospective landlords with fake references. These fake references are usually friends or family members who will tell outlandish tales of how perfect and respectable that tenant was. Don’t be fooled. Here’s how to determine if it’s a set up:

a. If a tenant cites that he or she lived with another landlord for two years, purposely misstate the amount of time when calling to verify. 90 per cent of fake references are simply told to confirm a tenant lived in a unit, and that they were great renters while there. They will agree to whatever time period you insert.

b. If a tenant states that he or she lived in a house prior to moving, ask who owned it. If a name is provided, call a real estate lawyer and have the Parcel Registration for the property (PIN) pulled. Lawyers have access to the property registration system and can verify the name of the legal owner (this will cost around $45). If the name of the legal owner does not match the name you were given, that should raise alarm bells.

c. Check employment references competently. Search companies online; use LinkedIn to verify job titles. Compare phone numbers on websites to the numbers provided by prospective tenants on applications. Call those numbers and speak with employers using the same method described in step a.

d. Use Google to search the name of the tenant. Many notorious tenants have an online presence and other landlords have posted stories about them. Some have been referenced in multiple newspaper articles, with their names and faces published warning the general public.

2. Find out how they live

Once you’ve learned the current address of a prospective tenant, try to have him or her sign the lease documents on those premises. Volunteer to bring the documents to their current abode; insist on it if possible. This will allow you to see firsthand how he or she lives and is likely to treat your property. If upon your arrival you discover the place is a messy disaster, conjure an excuse and leave. If reluctance is shown to have you see the interior, take it as a sign that he or she has something to hide.

3. Insist on guarantors

When renting to a student or a young person, it should be mandatory that a parent co-signs or guarantees the lease. If a prospective tenant says that his or her parents are not willing to co-sign, or are unavailable, you’ll be renting at your own risk.

4. Do not be desperate

Often landlords find themselves open to tenants they wouldn’t normally consider when they are in a bad situation, financially. This point cannot be stressed enough—if you can’t afford to have your unit vacant for at least three months, do not become a landlord. Predatory tenants will sense the desperation and target you. When the mortgage payment is due and you cannot afford to have the unit vacant for a few months to find the right tenant, you will likely make risky decisions to try and cover your loss. This is how many tales of woe begin.

5. Look for dual income families; stable jobs

Typically, people who change jobs frequently are more likely to be sources of trouble for landlords—as are families with only one income earner. This is a sad truth. Also, be wary of renting to anyone whose monthly rent is more than 30 per cent of their monthly income. Rent/income ratios above 30 per cent tend to be problematic and create arrears.

By following these five simple steps, landlords are less likely to fall victim to predatory tenants. Normal landlord/tenant problems can happen to anyone, but the very worst cases can be avoided using a thorough initial screening process.

Contact Ike J. Awgu, B.A., J.D. for more help with tenant problems. Phone: 1 -800 -737 -9571. Email: info@landlordlawyer.ca

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