select
|

How to handle defaulting tenants

Whether handling a rental property personally or through a reputable agent, the most crucial way to avoid defaulting tenants is to be equipped with the facts and knowledge of how to act decisively to protect your asset as a landlord, says Grant Rea, rental specialist at RE/MAX Living. 
 
He notes that the first line of defence against this predicament is the initial screening process, which should include meeting a tenant face-to-face when the property is shown initially as well as the collection of essential personal information from the prospective tenant. There is also the matter of vetting the tenant by verifying employment, references, their identity and conducting general background checks.
 
Rea says that using a professional rental agent in the vetting process can be a massive benefit the landlord, as their expertise and experience can prove to be critical in these situations.
 
Rea advises that landlords facing the worst case scenario should consider the following important elements and possible recourse:
 
1.    Communication

Often in a scenario where tenants have withheld rent, they face an embarrassing situation and, depending on the circumstances, may simply avoid contact with the agent or landlord. At this point the landlord is advised to get the ball rolling towards eviction or another form of legal action. “However,” says Rea, “if the tenant is willing to communicate, make the arrears known to them and the course of action you intend to take if the breach of their lease is not remedied.”

It is important to note that action such as changing locks, interrupting services, aggressive and threatening action and forcible eviction without a court order are unlawful acts as per the Rental Housing Act. Nothing beats fair, flexible and reasonable communication and compromise.

2.    Decisive action

The Consumer Protection Act (CPA) applies to the majority of residential leases and requires that the notice of breach to the tenant gives them 20 business days to remedy their arrears. Essentially what this means is that if immediate action is not taken when the rent is late, the landlord will find themselves a month down the road with a possible second unpaid month looming. If the breach is not rectified within the 20 business day notice period, the landlord may proceed to terminate the lease agreement in writing, notifying the tenant that they are in unlawful occupation of the premises and that they need to vacate the premises immediately. Most courts will require that due process is followed and it must be proven that adequate notice was given as per the CPA. An eviction can often take as long as three to four months, depending on the circumstances.

3.    Legal action

“If such a notice fails, as a rental specialist, I would, without hesitation, employ the services of an attorney to further communicate with the tenant and to advise on further action,” says Rea. “I am a firm believer in using a specialist contract or lease attorney. If you have clear, written communication you can employ the attorney to approach the courts for a ‘rent interdict summons’ to recover arrears and, in some instances, the legal costs incurred. The court procedure can be a long-winded and costly one, but if you feel the relationship with your tenant is so strained and they are refusing to move, it is the best course of action.”

He notes that in some cases the landlord may approach the courts with a ‘Section 32’ application, which is an attachment of property in security of rent application, permitting the sheriff of the court to immediately itemise and remove the contents of the property until such time as the arrears are settled. This application is usually used where the landlord believes that the tenant is about to remove the movable property upon the said premises in order to avoid the payment of the arrear rental. Rea warns that this action can result in backlash from the tenant which can be devastating to the property as the response may occasionally be vindictive.

“The most important aspect of dealing with a defaulting tenant is not to let a day go by without taking action. Many tenants will abuse the grace shown by landlords and stretch the situation as far as possible. It is important to get things in writing and send registered letters or emails with ‘read receipts’. Remember to quote elements of the lease and state amounts owed with original documents indicating utility amounts outstanding. If adequate records are kept and the landlord acts decisively, there is no need to lose sleep over a delinquent tenant,” Rea concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    • 14 Feb 2018
      While you may not have intended to place your home on the market, what do you do if you receive an unexpected offer on your home? In areas where demand outweighs the current supply of homes available to buyers, it is not unheard of to have buyers make offers on homes that aren’t on the market, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      If you are looking to sell your home this year, Debbie Justus-Ferns, divisional manager of Renprop Residential Sales, says that there are five crucial things to do before the ‘for sale’ sign goes up.
    • 01 Feb 2018
      February is the month of love and to celebrate we will be posting about all the things we love this month. Follow the #MyPropertyLoves hashtag to keep up with our favourite things.
    • 01 Feb 2018
      After saving up and months of searching for the right home, applying for a bond and patiently waiting for the keys to the front door, it is finally time to cross the threshold and move into your new home. Now what?
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK