No matter how fair and responsible a landlord you are, the time will come when you cannot make a disgruntled tenant happy. And you might never know why they seem determined to be combative.
The old adage that 5 percent of your tenants cost 80 percent of your or your property manager’s time can be all too true. This is especially the case when you have a problem tenant who is irritating and difficult—even maddening—but whose behavior does not technically meet the threshold for “eviction-eligible.”
Why an Angry Tenant Is a Dangerous Tenant
Often these angry and disgruntled tenants use up that 80 percent of you or your management company’s time by constantly complaining, or sending nagging emails, or making repeated annoying calls, or leaving rude, curt, or angry voicemails.
If their complaints have to do with maintenance issues, overall health and safety, or a peaceful tenant community, they may place you in a very difficult position. No matter how irritating the tenant is, you must protect your liability and stay out of a legal quagmire by providing non-emotional responses and principled attention.
You may think the complaint is less important than other issues you face. You may think the complaint can be scheduled to fit comfortably into your budget or your time schedule. But your tenant may have a very different opinion.
It’s very easy to begin treating a problematic tenant dismissively or avoiding returning calls. But this unequal treatment may return to haunt you.
Keep in mind, some states and municipalities are landlord-friendly but many are tenant-friendly. So, I am always going to advise that you handle complaints fairly and evenly, and manage all tenant communications with an eye toward the thought, “What if I have to defend my actions in court?”
Legal action is, of course, only one consequence of handling a difficult tenant. An angry, disgruntled tenant can wreak deliberate—and very expensive—damage upon your property. They can do this either with physical damage or by poisoning the well of morale and goodwill with your other tenants.
Related: I’ll Never Evict a Tenant—Here’s Why
They can also leave negative reviews online that can be very costly to combat or report negligence, discrimination, or housing violations to city or county governing entities.
Honestly, sometimes the best way to win a battle is to strategically plan, in advance, how you can avoid the damages these conflicts can inflict. Your best device/weapon in this situation is: the power of a well-structured lease.
A Simple, Proactive Solution
Good news, neither you nor your tenant need to remain in a prison of tenant-landlord dysfunction. By structuring your lease template to allow both you and your tenant an escape, you take control and limit your losses by offering your tenant options in the face of their displeasure, dislike, or just plain disagreeableness.
This makes your life easier. I have found it actually mitigates your overall loss in terms of time, vacancies, and lost rental income.
Approval From Your Attorney
Perhaps spending time chatting with your attorney is enjoyable to you. Maybe she or he has a fun and festive personality that leaves you laughing and happy. Great! But that doesn’t mean you want the clock ticking on lengthy discussions about pain-in-the-anatomy tenants.
So, with one thoughtful, attorney-approved additional clause in your lease, you can give your tenant a non-confrontational way to move on. It will be imperative to discuss it with an attorney familiar with the local tenant-landlord statutes to stay in compliance with the ordinances in your area.
With this clause in your lease, you have the satisfying ability to remind your tenant that, by conforming to the process outlined in the lease, they can exit the agreement early with no adverse response from you.
What to Include in This Lease Clause
This simple clause allows a tenant to notify you in writing of their desire to leave. They must give you some amount of advance notice of their move-out date, and they must couple the notice with a specific rent penalty that must be paid to release them from the remainder of their contractual obligation.
This is an excellent way to offer them a possible option for early withdrawal without giving them an easy way to throw off their responsibility to the legal contract with you to which they affixed their signature.
Here is the clause I have used in many of my leases in multiple states. But just a reminder here, I am not an attorney. I do not play one on TV, and I am not playing one in this article. So, please use my sample clause as the beginning of a conversation with your own legal counsel before adding it to your contract with your tenants.
“Tenant and Landlord agree that early termination of this Agreement (termination prior to the end date identified above) shall occur upon no less than 30 days written notice of Tenant and payment by Tenant of a cancellation fee equivalent to three (3) times the monthly rent or the remaining lease amount, whichever is less.”
As you can see, the clause is short, direct, and easy to understand.
Why Is This Clause Important?
Well, more often than not in the human mind, the ability to have a “choice” means we don’t actually feel the need to choose at all. The ABSENCE of choice causes people to feel trapped, rebel, and become aggressive, chafing at the bit of dissatisfaction. This is what causes them to become difficult and damaging to your time, your property, or both.
When you remind your tenant they have the option to cancel the lease, they will usually choose not to act on it. But they may feel comfort in knowing the option exists.
Suddenly, the pain-in-the-derriere tenant becomes calmer, more pacified. They stop complaining. They stop calling. Because each time they do, you remind them they have options!
Choice makes people feel safer and less aggressive than lack of choice, which makes them mad. No one likes to feel powerless or trapped.
Lease Structure Is a Path to Smooth Sailing
So nip messy tenant issues in the bud by providing them with a choice to stay put and wait the lease out—or alternatively, to buy their way to freedom. By the way, in 30 years of ownership with thousands of tenants, I have only had two choose to exercise the option. But in those same three decades, I have seen the option of “choice” neutralize the most caustic and unpleasant of tenant conflicts.
Sometimes they just bite their tongue and serve out their lease. But with this method, I have also had truly horrendous tenants become long-term and positive members of my apartment communities. Sometimes the best solution is preparation.
I will have some other options for managing difficult tenants in the second part of this series of articles.
Have you had issues with problem tenants? How did you resolve them? What did you learn?
Share in the comment section.
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.