Every business requires dealing with problematic clients. In retail, you hope they will just go elsewhere. However, in property management, aside from the challenge of managing buildings, landlords and onsite managers must deal with difficult tenants. It is an inevitable part of the job.
Even stellar tenants that you enjoy having in the building can pay rent late, play music too loud, have disputes with neighbors or create other issues that you need to address. When a problem with a tenant arises, you need to act quickly and diffuse the situation.
When managed effectively, tenant issues are usually resolved (or tenants may be asked to leave). Here are some tips for dealing with difficult tenants.
Make Sure Potential Tenants Are Reliable
Showing a rental unit is partly about filling a vacancy, but mostly you want to see if this is someone with whom you want to have a long-term relationship. Avoid any hint of discrimination or fair housing issues. However, you want to get to know potential tenants.
Start by interviewing applicants, learning why they want to leave their current residence, and determine what their expectations are. Request that prospective tenants submit an application during the first showing, so they do not have time to create fake histories and references.
Speak with previous landlords. The current one might give a glowing recommendation, so the tenant can become your problem. Try to reach their direct supervisor at work. Good employees are more likely to make good tenants.
Once they are going to definitely be a tenant, be extremely welcoming. Check on how things are once they are settled. Show that you care about them … and your property.
Keep Written Records Of Everything
If clearly stated in the lease, tenants who sign them are agreeing to the rental regulations and policies. A well-crafted lease should detail rules applicable to residents and guests in your property, including tenant and landlord responsibilities, rules about pets, smoking and noise, property maintenance, and rental payment information.
Nowadays, it is also important to stipulate rules about short-term rental use, such as Airbnb. Walk a new tenant through the lease provisions before they sign and provide them with a copy. From then on, document everything on paper or digitally.
Make notes on all calls, conversations, emails, texts, maintenance requests, complaints and the like. For larger complexes, using customer relationship management (CRM) software may make sense, otherwise, create a spreadsheet or old-fashioned paper file.
Be sure to use the same procedure for every tenant. These records will help if issues arise or the need to evict occurs. Additionally, it enables the landlord or next manager to see what transpired.
How You Treat Your Tenants Reflects How They Treat You
Late payments or other issues can be hard for a tenant to discuss. How you treat tenants with issues has a huge impact on the future relationship. Be understanding and respectful, but firm when it comes to sticking with building policies.
You also need to respect tenants’ confidentiality, whether required or not. This also includes limiting discussions about them with people named on the lease. A respectful conversation is often enough to stop an issue in its tracks.
Be direct and specific when outlining the issue and the consequences of not complying. Lastly, if you schedule a time to stop by a unit or meet, be on time to show you treat your role as a professional. It shows you respect them.
Always Be Calm And Rational
When issues arise, it is tempting to avoid talking with difficult tenants. However, that means losing an opportunity to resolve issues amicably. So, check your emotion before talking with the tenant. Your role is to represent the business as the landlord.
That requires being firm, listening, explaining clearly and not apologizing for the rules. Your body language and tone are part of delivering your message professionally. Make eye contact, use a steady voice and never show anger or be rude.
When difficult tenants try to intimidate you, stay calm and ask if the issue could be resolved. Finally, when you present the decision and reasons, being clear and calm helps the other person accept that the answer as final. They may not like it, but at least they will see your reasoning.
Neighbor Complaints And Eviction
If you receive complaints from one tenant about another, document it, recording when the issue occurred and what it was about. Suggest that the tenants resolve disputes between themselves. If the tenants cannot settle things, mediation might be the only option.
If a difficult tenant regularly disturbs neighbors, remind them about the rules they agreed to in the lease and possible consequences, such as eviction, that may be in their future. Again, always document everything, so you have evidence if you are forced to evict them or the situation ever goes to court.
Managing a property is managing a business. This requires developing the skills and knowledge to succeed. There will be difficult tenants among all the good ones. You cannot control this completely, but you can control your reaction.
Also, make sure you know the state and local laws that affect your actions, including landlord rights, tenant rights, specific notices and eviction process. Knowledge empowers you and enhances your confidence.
LCI Realty can help you improve your property management skills. Offering commercial tenant representation services LCI Realty helps clients become seasoned real estate investors and assists them in finding ways to enhance the value of their properties. They provide education on managing your real estate portfolio as well as the tenants in buildings.
For more information, contact LCI Realty at (480) 565-8981 or at lcirealty.com.