6 Tips for Handling Difficult Tenants

If you are in the landlord game any length of time it is simply an unavoidable happenstance of renting property — sooner or later you rent to a tenant that is difficult to deal with.  Maybe they are difficult to deal with — or maybe you are difficult to deal with!  Either way, the communication usually comes to a grinding halt, and the situation goes into a tailspin.

Maybe they haven’t paid the rent like they should.  Maybe they are making it super difficult to get into the unit and make repairs.  Maybe they are simply being belligerent.

Fear not.  There are strategies you can employ to extract yourself from the situation with the minimal amount of damage to either party.  Here are some tips to help.

  1. Treat the tenants with respect.  Yes, I know they don’t deserve it.  But aggravating them won’t make the situation any better and get you any closer to your ultimate goal of resolving the situation.  Don’t make the matter worse.  Refuse to participate in any slander or arguments.  Keep it civil.
  2. Be clear.  Don’t be wishy-washy.  Be very careful of what you say and how you say it.  There is an excellent chance that it will get misinterpreted anyway.  So be very clear in your communication.  When you and the tenant agree on something, write it down and show it to them for their approval.  Poor communication is most likely what got you in the mess in the first place.
  3. Agree to disagree.  It is OK.  Let the tenant know early on that you will do everything possible to come to agreeable terms, but if you cannot then that is OK.  Let the tenant know that they may not get everything they want — just like you may not get everything you want.  Prep them that there may have to be some give-and-take.
  4. Be consistent.  Don’t change the terms unless you are compromising on something and getting something in return.  Compromise is a fantastic avenue for resolving differences.  So embrace it.  Just make sure to be consistent.  And rather than try to tackle ALL of the issues in front of you at once, focus on just one.  Get that resolved before moving on to the next.
  5. Try to be as helpful as possible.  Look, the tenants aren’t happy about the situation either.  So try to take your eyes off yourself and place them on helping the tenants.  It doesn’t have to be a win-lose scenario.  You might be able to help them in such a way that it also helps you!  So start from that perspective as that is usually the best solution to a win-win scenario.
  6. Give choices; avoid ultimatums.  No one likes to be painted into a corner.  Give the tenants choices.  For instance, when the tenant owes us money we give them a couple of choices.  They can either pay the late rent and fees within the next couple of weeks on an agreed upon date, or we will proceed with eviction.  We don’t threaten them with eviction — it is just a natural consequence of following through on what we agree to.

House Cleaning made simple

At turnover, when a tenant serves notice to vacate, it is customary for the unit to be cleaned between tenants.  It’s like the Holiday Inn — no one wants to check into a dirty room.  Well, no one wants to rent a dirty home.  But as surprising as it sounds, it is difficult to find a good house cleaner.  Fortunately for us, we found one!

We sat down with Briana Norde, President of Caliber Cleaning in Lynnwood to learn a little more about what separates the wheat from the chaff in the world of cleaning.

FSPM: How long does it typically take to clean a 2/1 unit?

Briana: In a unit with normal build up (i.e. not excessively dirty or extremely clean) it typically takes 6 hours to clean a 2 bed/1 bath unit

FSPM: What things do other cleaners miss that you guys clean?

Briana: The top 3 things I have seen missed by other cleaners, that are included on our standard Turn Over Clean checklist are: cleaning under the refrigerator and under the stove, taking down light fixtures to clean them instead of just dusting them and cleaning both the interior and exterior window tracks.

FSPM: What success practices make your job easier?  i.e. What can landlords do to make your job easier?

Briana: The #1 thing landlords can do to make our job easier is ensure their properties our completely vacant when we go in to clean. Sometimes there are still items left behind and it becomes time consuming trying to decipher what to leave in the home vs. what might be garbage.

FSPM: What is the difference between a professional cleaner like Caliber versus an amateur cleaner like a landlord?  Can’t anyone clean?  (I know the answer, but I’d like you to answer it.)

Briana: Anyone can definitely clean, the difference is the standard and level of clean that is expected. If a landlord expects their property to be maintained and returned to them in a clean manner they need to set the standard high when presenting a new tenant with the property. Having a professional cleaner with experience in Turn Over cleans is very valuable in ensuring that standard is set high. Most tenants will clean the visible items. For example, they’ll run the vacuum, clean the tub/countertops in the Bathroom, and wipe down the counters in the Kitchen. However many won’t think to hand wipe the baseboards, or clean the interior appliances, interior cabinets/drawers, wipe down all the woodwork around the doors, etc.

FSPM: How have you been able to succeed?

Briana: We have been able to succeed with our company in the Turn Over Clean business by creating a proprietary 5 page checklist that we use during every single Turn Over Clean that we complete. In addition to that we have Quality Inspection Managers that come and check the cleaning jobs to ensure nothing was missed. Completing a Turn Clean is very different from cleaning an occupied house and we understand that. We have a training manual dedicated to these types of cleanings and train our crews very thoroughly. This is how we have been able to establish ourselves as one of the premier Turn Over Clean companies in the Pacific Northwest.

We feel both privileged and lucky to have Caliber Cleaning on our side.  It takes such a burden off this process of a rental turnover.

How to handle security deposits

In the world of property management, nothing is more important yet controversial as security deposits. Owners try to “make money” off tenants by keeping their security deposit. Tenants sue owners often to get their security deposit back. Here are a few ‘basics’ to help keep both parties out of hot water.

Setting the amount: A lot of owners will set a very low security deposit. Their theory is that by setting the deposit low they can attract a lot of prospective tenants and rent their unit quickly. And they are absolutely correct.

The problem is they attract the wrong kind of tenant. They find people who are not able to save money — who live day-to-day. This becomes a problem when the tenant has a large expense (such as an auto repair or medical bill). Often the rent plays second fiddle to the other expense and rent is either late or not paid.  Once this cycle starts, it rarely ends without an eviction.

Hardly ever do owners set the security deposit too high.  But at Full Service Property Management, we set a security deposit equal to about one month’s rent.  We have found this is not too high of a deposit for most good tenants, but is high enough to attract those tenants who are resourceful and plan ahead.  Have you seen those apartment specials advertising “Move in for just $50”?  You can be sure that in most instances the ‘move out’ will cost the landlord a LOT more than that!!

Managing the deposit:  There are lots of rules to keep landlords from spending the tenants’ money.  (And until the tenant moves out, it should be considered the tenants‘ money, and not the landlord’s!!)  In WA state, owners must have the security deposit in a separate account (so they don’t co-mingle the tenants’ money with their own and end up spending it).  For one rental this may not be that big of a deal.  But as the number of rentals increases, so does the importance of this accounting practice.

Owners cannot hold a security deposit (in WA) without a detailed move-in checklist showing the condition of the property.  Many landlords think they are holding a security deposit, but without a move-in checklist all they have is prepayment towards rent — hardly any security at all!

Returning the deposit – the move out: Many owners abuse the security deposit by keeping it without justification, and give the rest of us landlords bad names.  It is important to be fair.  That works both ways.  A tenant also needs to understand sometimes that what they consider ‘clean’ isn’t necessarily commonly agreed upon.  For example, just because it is convenient to leave behind a large piece of furniture doesn’t necessarily mean anyone wants it!

In WA state, just like with the move-in, a move-out checklist is also required.  This is when the rubber meets the road.  Comparing the two checklists will determine and discrepancies.  But owners cannot simply get new carpet at the tenants’ expense.  It is not that simple.  The cost of that carpet needs to be depreciated over the life of carpet.  If the carpet is 5 years old and it has a 10-year lifetime, then the landlord can only deduct half the cost of installation of new carpet.  Different tasks have different lifetimes, and there is no standardized table of material lifetimes.  It is all a gray area that should not be abused by either party!

Also in WA state, a landlord has to give an accounting of what he/she is holding back on their security deposit.  This accounting has to be mailed or given to the tenant within 14 days.  At Full Service Property Management we call it ‘the 12-day letter’ to make sure we do not run afoul of the law.  This is a sticky area that needs to be adhered to religiously.  A landlord may not know all of the costs in 2 weeks.  So we will put estimates and placeholder amounts in our calculations.  We almost always do a $250 utility holdback.  We cannot tell you the number of times we have refunded a tenant’s security deposit only to have an unpaid utility bill come in afterwards!

In summary: Be smart and be fair.  If you are a tenant then leave the place as you found it or be prepared to take responsibility for damage.  If you are a landlrod, don’t play with other people’s money.  In both cases, handle the other party with respect.  Treat them as you would want to be treated.  Best of luck.

 

Disclaimer:  We are not lawyers, and this information is not offered as legal advice.  Laws change and different states may have different rules in place.  You are advised to seek the counsel of a licensed legal representative regarding any of the matters discussed here.

Peter Nelson is President of Full Service Property Management in Seattle, WA.  He and his wife have their own rental portfolio and have been successfully managing their portfolio and those of their clients for over 30 years.  More information is available on their website at www.fullservicepm.com.

Why we don’t call ‘Rooter’ companies

We all have those ‘moments’ — those moments when the kitchen drain or the toilet don’t drain or flush.  Usually such moments are meant with angst and worry.  We want the plumbing fixed, and we want it fixed NOW.  So we go running to the phone book or internet looking for a plumber.  We’ve all been there.  It’s likely we’ll all be there again.plumber

When it happens to a property we manage, though, our service manager has been given specific instructions to stay away from companies with the word ‘rooter’ in them.  I am not going to name names, but we have all seen them.  Why?  We have a few reasons.  None of them are scientific or proven — all of them are based on experience or superstition.

We have found that companies with the name of ‘rooter’ in them tend to charge more than other companies.  They usually have large advertising budgets which need to be funded through higher labor and bid rates.  We would much rather call ‘ABC Plumbing’, or better yet “Joe’s Plumbing’.

Call us soft, or call us a small business.  But we like the idea of entrepreneurship — of some small-time plumber struggling to make it in business.  I guess we like underdogs.  We also figure the small-time plumber doesn’t have the advertising budget or the bureaucratic overhead of a large company.

It doesn’t take rocket science to figure out how to snake a drain!  Joe probably has the thing figured out just as well as the rooter dude.  And Joe just might add some personal service on top of it!.  One thing we know for sure from experience: Joe’s bill will be less than the other guys’ bill.

We continue to work hard to save our owner’s money whenever and wherever we can.  It is too easy and too convenient to not care and pretend you have a blank check.  We don’t like that at all.  So the next plumbing clog, we’re tipping our hat to the little guy!