Crazy Tenant = So Much Damage

17 Replies

Hey BP! not having much luck getting responses in the forums, but I'll keep trying. I have been thinking about the worse case or "nightmare" tenant situation. This of course involving extensive amounts of purposeful damage being inflicted on your property and you not being able to do anything about it, or at least feeling like there is nothing you can do. 

What steps would you take to mitigate the extent of damages and resolve the issue efficiently? 

@Graeme Ford   Welcome to Bigger Pockets!

Stay calm, polite, firm, fair and professional. Address the issue immediately. When there is a significant problem, don't go it alone. Having witnesses to tenant bad behavior is essential. So is documentation. Safety is number one, so protect yourself.

Notify the police when appropriate and get a copy of the police report. This is important when persons or property are endangered from a criminal act. Also the police report is something your insurance company might need if you choose to file a claim for damages.

Don't hesitate to take the steps necessary to resolve serious problems quickly, effectively and efficiently. Post legal notices to conform/quit when necessary. Negotiate a move-out plan. Engage the services of a top-notch attorney who specializes in landlord-tenant law .

Hope that helps. What specifically is your situation? Hard to provide input on a vague "what if" scenario.

@Marcia Maynard thanks for the welcoming to Bigger Pockets! 

Sorry for making it a what if scenario, but I am still in my education phase so I do not have a specific scenario to speak to. As with most newbies this is of course a concern that I have versus a current scenario so I am trying to prepare for what hopefully won't happen. I understand the importance of adequate tenant screening for prevention, but even the most thorough screening cannot mitigate all risk. 

I actually just watched podcast 83, which you featured in a couple weeks ago!! So cool to hear from you! 

Thanks so much for the guidance

As you're aware, if you do your screening properly and have a good lease, you can mitigate much of the risk.  However, there is not much you can do, for instance, recently, when a teenage son of one of your long-term tenants decides to punch holes in walls and kick in the front door.  You take pictures, have it repaired, bill the tenant, and follow the lease and your landlord/tenant laws for proper procedures for eviction if they do not pay.  Since this tenant has had similar damage twice now, I prefer not to renew, but I also do not want to trigger any fair housing issues, so I likely will explain at next renewal that I will require a larger security deposit, maximum allowed by the state, before renewing their lease, and I will still expect them to cover any future damages immediately upon receiving repair bill.   In addition, if you've screened properly, you are likely better able to get repaid as they at least started with good credit and decent income, so likely do not want to risk ruining it with judgments and evictions.   I have had tenants lose their job and/or bring in an unapproved pet that has destroyed things.   There is a process, like Marcia said, and I also prefer to negotiate a move-out plan rather than evict.  Having an emergency fund is key so you're more likely to keep it business rather than stressing out that you are not prepared for a turnover.     

Some of the worst damage comes from Cats, and dogs a close second.. best thing you can do is not permit pets.. I'd do a search here on BP for Cat urine, pet damage, you'll probably find some interesting recaps of what people have had to deal with.

SFH are hardest to keep track of with inspections,, in a complex a neighboring tenant usually will rat out someone that's off the chain so to speak and it a lot of noise is coming from the unit.. and a apartment has much less to damage then a entire house. First heads up for me in damage has been noticing the "Blinds or Windows or Screens are a miss,, broken, propped open or like the blinds are missing.. then I do a check..

@Graeme Ford Okay. I get it. Well how about a real scenario that had us sweating?

Long term tenant, whose cognitive ability starts to deteriorate as she ages, now in her late 70's. One young guy, in early 30s somehow schmoozes his way into her life and starts hanging out at her apartment (a duplex unit in a group of four duplex buildings). Soon this guy becomes an unauthorized occupant. 

We are unaware of anything going on until we are working outside at the property one day and meet a probation officer outside the door to the unit. He's checking to see if one of his charges is living there. No one's home. We introduce ourselves and he tells us the name of a person who has listed the apartment as their current address. Never heard of the guy and we inform the officer it's the apartment of a retired senior woman. Probation officer tells us the guy is going to get arrested again soon, warrant out, and "this guy is bad news, so don't confront him if you see him." With his name, we look up info in the court records and find out he has a many drug related offenses, including meth.

When our tenant comes home, we go to talk with her. She denies knowing anything. We start watching the apartment like a hawk. Soon we see quite a bit of traffic in the evening. Lots of surely looking characters in their 20s and 30s coming and going. We think drug dealing. During the daytime, all's quiet on the western front. We (husband and I together) go to the unit to talk to the tenant again about our observations and through the front door we see a young woman exiting the bathroom. The place is noticeably messy. Our tenant becomes defensive and adamant that these friends of her and are welcome, that they aren't living there, just visiting. They appear stoned out to us. We observe our tenant is out of her normal character, looks disheveled and acts angry and agitated.  We are sure something bad is going on. We let her know we need to do a maintenance check and give her the proper 48hr notice to enter. Two days later we arrive with our handyman, but she refuses to let us enter. We contact our neighborhood police officer to alert the police about our observations of possible drug traffic and concern for our tenant. They increase patrols, but tell us is little there is little they can do until either the tenant complains or they see criminal activity.

What about the neighbors? No one is talking. The tenant in the unit on the other side of the duplex often works out of town and says he hadn't noticed anything. We continue our surveillance. More activity. We contact the probation officer when we see people there and he tells us the guy he was looking for is in jail, arrested the same day we had met him. The guy who has started living in the apartment with our elderly tenant is obviously someone else! 

We finally get his name and eventually a no trespassing order for him. We even find out the name of his mother and talk to his parents. Very sad story. The son of a wealthy family who had gotten involved in the meth scene and ended up homeless living on the streets. Well educated, good looking, personable and adept at manipulation. Uses others to feed his drug habit. We actually meet the guy sitting on the front steps and see how persuasive he is. We tell him he can't be living there and needs to move on. The talk... "You know and we know you can't be living here, time to move on. Living here in not an option for you." He moves out. On the street again or the next couch he can find. We give his parents tickets to my husband's Christmas concert, a fundraiser for a charity organization in town that works with homeless people. We listen to their story, we feel their pain.

Without our tenant objecting to his being there, we had to go the route of serving her a "comply or vacate notice", contacting her case managers (Section 8 and senior assistance), and rallying the village for her safety. The police were on alert. After the crowd of undesirables were gone, our tenant was still angry with us for intervening. We continued to watch the property and sure enough, six months later the activity starts up again. 

We made our presence known. Made it uncomfortable for people who don't belong on the property to be there. Employed the techniques of Crime Prevention Through Environmental Design (CPTED, look it up). Increased lighting, cut back bushes, cleaned up the premises, etc. Asked neighbors to be on alert. Stories of their observations start to come out. Oh yeah... verbal confrontations outside with people screaming at each other. I'm documenting everything we observe or hear about.

One summer night the apartment is again full of people. Loud, others coming and going, some stoned out. We call the police. People scatter. 

We continued to work with the senior services agencies in our town and the Section 8 case manager to get our tenant into a more appropriate place for her.... assisted living. Her mental health had deteriorated. We physically moved her belongings, including her cat, to her new apartment at a senior care center. Her last words to us were, "You know, I own this place (referring to our 8-plex), it's been in my family for generations. But it's okay now because I know you will take good care of it."  Bless her heart.

Damage is part of the risk of our business, as with the rental of any item, but the risk is generally low. 

Best defence is proper screening and regular inspections, quarterly, will control most damage along with only providing M2M leases.

Originally posted by @Marcia Maynard :

@Graeme Ford Okay. I get it. Well how about a real scenario that had us sweating?

Long term tenant, whose cognitive ability starts to deteriorate as she ages, now in her late 70's. One young guy, in early 30s somehow schmoozes his way into her life and starts hanging out at her apartment (a duplex unit in a group of four duplex buildings). Soon this guy becomes an unauthorized occupant. 

Wow!  That is a complicated situation.  You handled it with a lot of compassion and patience!

@Marcia Maynard   Wow, what a story!  Everything in the way you handled it is impressive, and that ending brought a tear to my eye (is it dusty in here?  must be dust, I'm not crying!)

@Marcia Maynard wow that's so sad and intense at the same time. Good on you for the way you handled it. I tend to have more of a temper so maybe I can learn a bit from you lol

@Marcia Maynard wow what a story and thank you for taking the time! 

Very sad situation and I think it is amazing how you handled the situation. I can only imagine the frustration that you may have been feeling especially seeking authoritative figures to help resolve the issues with a lack of actionable intervention. I think that most people would have stopped there feeling they were alone to manage the situation. 

You kept the best interest of all parties in mind and I think that is very important especially if you want to have a real grasp of why what is happening, is happening. You and your husband did a real service to the community and your other tenants, which is something that investors do not get enough credit for. 

I have found a document on Crime Prevention Through Environmental Design (CPTED) and thank you for pointing me in that direction! Definitely something that I would likely not have found on my own and I will definitely be looking to implement this as I grow a portfolio. 

Thank you so much for your wisdom!

@Thomas S. thanks for the reply! I am actually planning on moving back to Ontario at some point near 2018's end. 

I have a question about the month to month leases in Ontario. I had heard in one of the podcasts of a BP member from the Washington, D.C. area that had said month to month leases there are considered a "lifetime" lease. I may be paraphrasing that incorrectly, but is that the case in Ontario as well or how does that work? 

I feel like worrying about a crappy tenant is like getting married worried about divorce. Yes, there is a chance that would happen. But you have to filter your prospective tenants and then maintain a mutually respectful relationship with them. 

Good luck!! *knock on wood* I haven't had any problems with any of my tenants and I believe it's because I'm picky, I'm clear about my expectations + I'm nice (but firm).

IN Ontario a tenants lease can never be terminated. The only way to get rid of a tenant you do not want is through eviction or owner occupancy. Eviction is rare as our LTB has a no eviction policy. Even with just cause to evict the board will continue to give tenants 2nd, 3rd, 4th chances rather that evict.

Experienced landlords avoid taking tenants to the aboard and prefer to take more creative approaches to encouraging bad tenants to move along. It can often take years to get rid of a difficult tenant which is why in Ontario screening is elevated to a very high level of importance.  You must be very selective and as a result reject may applicants that landlords in other areas would have no issues accepting. Section 8 is very popular in many parts of the US. In Ontario you are an idiot to risk renting to any one on government assistance of any form.

It is not uncommon for some landlords to violate human rights codes and, dare I say, discriminate to protect their investment. Professional tenants are very common in Ontario.

Originally posted by @Sarah D. :

@Marcia Maynard   Wow, what a story!  Everything in the way you handled it is impressive, and that ending brought a tear to my eye (is it dusty in here?  must be dust, I'm not crying!)

 Definitely dusty in here.... I had the same problem.

@Thomas S. good to know. My parents just before I was born made the mistake of renting to an individual on government assistance so I know exactly what you are talking about. If I recall things were good for a couple years, but somehow circumstances changed and on led the nightmare that for the most part turned him off of investing. They do still use their primary residence for house hacking with an upper level apartment, but haven't branched beyond that since. 

I find it amazing that it took me so long to realize the power of real estate especially living in a house hacking situation for my entire childhood and adolescence. I literally lived right underneath it! 

Hi @Graeme Ford.

Crazy is such a subjective term. However i do have a story for you.

We own rental properties in Cornwall, Ontario. One of our tenants accumulated three cats in a one bedroom, 2nd floor unit. She was not very tidy and the litter box was rarely, if ever, cleaned out. Cats are generally a clean animal if they are given the chance to be that way. With only one litter box, and in complete dismay, the cats started urinating anywhere else they could. I’m not sure how long this went on for, but the urine seeped into the floor and into the drywall of the walls.

At the same time, the tenant stopped paying her rent.

And another coincidence, the place my dad was living in was put up for sale and he needed a new place to stay in.

So we made our application to the landlord and tenant board to repossess the unit for my dad to live in. This was in June 2017.

It’s now nearing the end of October and we are still not done with the renovations and have had to find a different place for my dad to live. I wasn’t going to let him live on the streets.

Needless to say, the damage was extensive… Not only did we have to replace the floor and the drywall about 12 inches up from the floor, but we also had to replace drywall where were there were obvious holes made by fists. The floor in the bathroom along the bathtub was also completely ruined due to water splashing out of the tub.

To date, the renovation has cost us about $10,000.00. We are hoping to finish the renovations by the middle or end of November to have a place for my dad to move into before the heavy snows hit the ground.

The tenant in question caused us grief, but more importantly, a high cost of damage. She moved to a place literally across the street and continues to watch to make sure that my dad will live there and threatens to file a report to the LTB if he does not move in. She’s a wonderful person… Isn’t she!

My lesson in all of this is to be careful when purchasing a property that has tenants already living there. If you choose to purchase, you choose these people as your tenants.

We are looking at buying our third property now. The experience has made us more aware of different potential problems that we might run into but has not discouraged us from looking at real estate investments altogether. Part our courage comes from the fact that we are surrounded with great people who have insight on rental investments, the fact that i am fairly handy with a lot of the repairs and people on this forum.

In order to progress in anything, one must take risks and move forward.

All the best!

@Graeme Ford ,

Everyone worries about horror tenants.. however.. I stress, time and time again-- YOU pick the tenant!   It's YOUR job to make sure they are responsible with their job, and with your property!    

Being a proactive landlord can stop a lot, if they ask something to be fixed-- go fix it yourself or go with the plumber for a quick inspection, so you can see how they live.   If you have regular  contact with the tenants and keep the lines of communications open, you will see the house  and there won't be a horror story. 

I will say, be picky, and be proactive.    We have some WONDERFUL tenants, who take care of the place and let us know if anything is out of line, they treat it like their own!   Also-- each year we give them a $150 upgrade,  and ask them what you can fix, this gives us a chance to look at the unit and fix anything needed.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here