Enforce Your Leases To Minimize Problems

1 Reply

Just checked the mail and there they were: rent checks ON TIME from previously "bad" tenants. My friend @Mindy Jensen had a post recently concerning what was a favorite lease clause landlords have. My response was the clause citing "additional rent due" in the event I have to go post any legal notice. I structure my leases with a built in discount for early payment. The lease may state an amount of $1200 due but if they pay early and it is postmarked by the 5th the tenant can take a discount. I have had problems the last 2-3 months with one particular tenant. Not only were they paying well after the 5th, but I was forced to go post a notice to pay or vacate. This resulted in the tenant having to pay "additional rent" of $150 each month ($75 loss to them in early payment discount and $75 for having to post to pay or vacate). The result? I received this tenants rent today. I have good relationships with my tenants BUT I enforce the leases. It makes a difference. After this "bad" tenant had to pay an additional rent of $300 I believe it got their attention. Don't enforce your lease and you are asking for problems. This does not mean you cannot give a great tenant a break. What it does mean is that tenants, like many people, will push the envelope as far as they can. I would MUCH rather have rents on time than chase people. It makes being a landlord much easier!

The Tenant Phase by Nancy Neville

THE FIRST MONTH (THE HAPPY PHASE)

During the first month of a rental period, the tenant is happy. They wanted the home, they got the home and everything is fine. THEY ARE VERY HAPPY! You spent a lot of time at the signing of the lease telling them what you expect from them and what they can expect from you. They seemed to be happy and they nodded in understanding.

THE SECOND MONTH

Somehow during the second month, when the newness wears off and the happiness falls into a routine, the new tenants become confused. They seem to forget what the rules are and when rent is due (even though they have a written lease agreement to refer to). If they are one of the few tenants who do not get confused during this time, this means they have jumped from the Second Month phase into the TESTING PHASE which may cause a few problems, but I will talk about that in a few minutes.

To help the Tenants not be confused during the 2ND MONTH PHASE, I always bill my Tenants their rent 10 days before it is due. It's during the 2ND MONTH PHASE that I will answer any questions they have and not make them put it in writing.

TESTING PHASE (May begin as early as 2nd month)

The TESTING PHASE is a very crucial phase. Whether the tenants and you get along is determined during the TESTING PHASE. More Tenants than not like to Test the Landlord. If they had gotten away with it with their previous landlord, chances are, they feel they can get away with it with you.... so they will try. They will pay their rent when they want to, putting you last and live the way they want to regardless of your rules.

It is very important to nip this in the bud during the TESTING PHASE, because if you allow the tenant to get away with things such as paying their rent when they want to and doing what they want, then chances are you will never proceed past the TESTING PHASE.

THE THIRD MONTH:

If you make it to the third month, that is good. But it is also very crucial during this time as well to make sure the tenant stays on course. The Third Month strengthens your position as to who runs what. During this time you want to make sure that the tenant keeps paying their rent on time and keeps obeying the rules. One little falter on your part can throw the tenant back into the TESTING PHASE. It is very important that you guide them during this time as to what you expect and want. It is important that you gain their trust and respect during this time.

THE FOURTH MONTH - THE COMFORT PHASE:

The fourth month through the first year is THE COMFORT PHASE: the tenant becomes accustomed to your rules and is starting to feel comfortable. If you have handled everything correctly, being strong when needed to be, and doing evictions when needed, the Tenant will feel secure because the Tenant will know what is expected of them and will feel comfortable and will want to stay. (Tenants usually feel comfortable with stability and sameness).

AFTER THE FIRST YEAR:

After the first year, the COMFORT PHASE becomes more stable and each year thereafter. It's just a matter of keeping your Tenant happy, yet, making sure they don't slip into the Testing Phase from time to time. Even old time Tenants will want to go to the Testing Phase if they see their Landlord falter, get too over generous or too understanding.

When that happens the Tenant's stability changes because the rules are changing throwing the tenant into the Testing Phase again, so we don't ever want to falter but always stay strong and in control.

THE MOVING PHASE:

During the moving phase the Tenant, no matter how many years they have been with you, seems to forget everything again. They become babies and they revert back to the TESTING PHASE. Once again they never refer to the Lease and must depend on you for answers.

During the MOVING PHASE, the Tenant can change personalities quickly. It's like they drank a potion that changed them from Jekyll into Hyde. They become this fiend, this villain that could destroy you and is probably the hardest phase of all the phases.

It is during the MOVING PHASE, that you must be cool, have all your wits about you and be prepared, yet still be cordial so as not to enraged the monster that seems to be lurking in your Tenant during the MOVING PHASE (as there is NO ANTIDOTE to calm the savage beast once it takes form). If by chance this happens, it is best to not confront the beast but to keep your distance until the courts can set it free!

With time everything will fall into place as long as you treat Land lording as a business! 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.