5 All-Too-Common Tenant Issues and How to Handle Them as a Landlord

by | BiggerPockets.com

Most tenants are fine, don’t get me wrong. But some of them can be an enormous pain. Tenants, like just about everything else in this world, follow the Pareto Principle: 20 percent will cause 80 percent of your problems. Furthermore, 20 percent of that 20 percent (or four percent) will cause 64 percent of your problems. And so on.

There are several types of typical problems that tenants will cause, of which the most common are:

  1. Nonpayment or asking for endless payment plans
  2. Damaging the unit and refusing to pay for such damages
  3. Endless complaints
  4. Making accusations of you or your staff
  5. Trying to make their problems your problems

We’ll deal with each one independently, but first, it’s important to talk about a basic principal of dealing with tenants. Be fair, but firm. And always act as your tenant’s ally. As I put it in a previous post:

“Make something other than yourself the ‘enemy.’ It could be the lease, the law, company policy or even the owner. But the enemy is certainly not the property manager. No, you as the property manager are the tenant’s ally. So for example: ‘I appreciate how hard this is; however, we have to follow the lease, and the lease mandates that we charge these expenses. We legally can’t make an exception for one unless we make it for all.’ Or perhaps, ‘I think we can find the best possible outcome given your situation that will fit with what the lease requires and the owner will accept.’ You are on their team trying to come up with the “best solution” (not necessarily what they want). The rules dictated by the lease, law, policy or owner are the “enemy” in this situation.”

This will calm down even the most indignant tenant and make almost any troublesome dispute better.

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1. Nonpayment or Asking for Endless Payments

Of course, the best way to deal with nonpayment is to not have it in the first place. And the best way to ensure tenants pay their rent is to screen, screen and screen some more. That being said, even with careful screening, some tenants will fall behind.

The best way to deal with these situations is to simply create a policy for how you will go about nonpayment and payment plans. It simply cannot be overstated how important systems are in your business. If you fail to put in a policy, you are likely to fall victim to whatever sob story the tenant throws at you. And I can guarantee you, there will be a sob story every time.

Our policy is pretty simple. Rent is due on the first and considered late on the fifth. Immediately on the fifth, a late fee is charged with virtually no exceptions. On the first workday after the 12th, we send out 72-hour notices telling the tenant that we will file for eviction if they do not pay within 72 hours. Afterwards, if we do not hear from them, we file. At this point, all eviction charges are put on the tenant’s balance. For every 12-month lease, we accept one payment plan. If the tenant does not comply with the terms we agree to, then an eviction will be filed. (Make sure to check with an attorney regarding your state’s laws to make sure your lease and policies are in compliance.)

It may sound kind of harsh, but you have to systematize this, and take yourself out of the place where a tenant could convince you to change your policy. You just need to say something like “I’m sorry, but those are the company’s policies.”

2. Damaging the Unit and Refusing to Pay for Such Damages

Whenever you sign a lease, you should make it very clear to the tenant what they are signing. You are not going to just fix whatever breaks no questions asked. If the tenant damages something, it should obviously be their responsibility to pay for the damages.

Some things are obviously not their problem; such as the roof leaking or a furnace going out. Some are pretty obviously their fault, such as a hole in the drywall. Unfortunately, not everything is so cut and dry.

This is one reason it is important to document everything in these situations. Take pictures of how things were when you found them damaged and what it looked like after the work was done. Make notes in your property management software for conversations with the tenant, etc. As my brother likes to say, “If it it’s not in [our property management software], it didn’t happen.”

Related: 5 Ways Landlords Can Achieve Better Tenant Stability

In many cases, you will have to make tough decisions regarding whether to charge the residents or not. We usually lean in the residents’ favor and take questionable costs on ourselves unless — but this is not necessarily the best way to do it. You should let the resident know when they sign the lease that there are some gray areas and that you will try to be as fair as possible, but for some maintenance items, even if they disagree, they will need to be charged. When this happens, sometimes they will yell at you. Part of being in management (and in real estate in general) is growing a thick skin. People yell sometimes; they will calm down eventually. Be fair (and calm), but firm.

And remember, tenants can’t expect you to get out there immediately. If they owned their own home, they wouldn’t be able to get someone out there to fix the washing machine that day, necessarily. You want to be quick (especially with HVAC and water issues), but don’t let them bully you here. It may take a few days and that’s not the end of the world.

As far as tenants refusing to pay their balances, in these situations we usually allow a balance to go up to 10 percent of the tenant’s rent before we are willing to file for an eviction. You can pick a different amount, but you need to be consistent.

3. Endless Complaints

Some tenants simply cannot be pleased. In many cases, they may just want to get out of the lease. For this reason, I would include a break-lease fee in your lease. Although, we’ve heard you’ll have more luck collecting it if you call it a, early termination option. Talk to a local attorney about what is allowed in your state. We charge, approximately but not exactly, two months rent for an early termination option. Regardless, you will want to be able to recommend this provision if it’s obvious the tenant wants to leave. That being said, I wouldn’t ever let the tenant out of their lease for free, just because they are a hassle. This sets a very bad precedent and could even be used against you regarding fair housing, unless of course, you are willing to do it for everyone.

If the person is asking for one maintenance issue after another, you should continue to send a maintenance crew out. But you can charge a trip fee if the issue turns out to be nothing. Just make sure to document or have the maintenance tech document this very carefully. Indeed, (again, check your state law). Just make sure you document it thoroughly and don’t overuse it. Lease violation fees are a disincentive for bad behavior, not a way to make money.

Regardless, with these tenants, it is usually best to elect to not renew their lease when their lease is up. Again, check your state laws, but usually  you will have a right to do this without even giving cause. Tenants who are a huge hassle are usually just not worth your limited time and limited energy.

Related: 5 Legitimate Reasons to Allow a Tenant to Break Their Lease

4. Making Accusations Against You and Your Staff

This is obviously one of the worst things that can happen to you. First of all, one of the reasons it’s important to be fair and respectful is that this reduces the likelihood of getting false or trumped up accusations thrown at you or your staff. For example, one study showed that doctors who spent more time with their patients were less likely to be sued on that fact alone.

The most common accusation I’ve heard is that of a maintenance tech or leasing agent stealing something. And the last time we were accused of this, it was demonstrably false. Even still, the first thing you should do is call an attorney. Once any sort of accusation has been made like this, you want to ensure you follow the letter of the law exactly.

What I can say is that you should make sure to document everything. And I would certainly ask those involved for detailed accounts of what happened, and get it in writing. Get all of the evidence you can. Unfortunately, with such things, there won’t be much but testimony. That being said, if you have a maintenance technician, for example, who has gotten multiple complaints or been accused multiple times, it’s probably worth seriously considering letting that person go.

5. Trying to Make Their Problems Your Problem

I remember once, when I was just getting started in management, I got pointlessly dragged into a dispute between two of our tenants. One of the women was accusing the other of being emotionally abusive and wanted out of the lease. So I went to their unit to try to work out a plan to get one of them out. Instead, I stood there in dumbstruck awe as each of them threw horrendous invective at each other.

Needless to say, I wasted an afternoon that day. In the end, you are not obliged to work out such disputes between tenants. You are there to set the rules (as long as those rules are within the law). Some tenants may want to make their problems yours and you simply have to refuse. Let them know that such issues have to be resolved themselves. You can give them their options, but you should leave it at that.

With regards to virtually every issue, it is best to create a system and stick to it as best as possible. Be polite and empathetic for sure, but don’t bend just because someone gets angry with you or tells you a sob story. And while you can’t come up with a system for each situation, you can for many and then add a policy for every new situation that comes up that you didn’t think of before. As time goes by, there will be less and less situations that come up that don’t have a policy on how to deal with them all ready to go.

Do you have any tips for dealing with problem tenants?

Share your advice below!

About Author

Andrew Syrios

Andrew Syrios is a real estate investor in Kansas City and a partner in Stewardship Properties along with his brother and father. Their company owns just over 500 units in four states.

17 Comments

  1. Tim Sabo

    Andrew,

    I’m sorry, but I could not get past the comment you made in an earlier post, about making ‘something else the enemy.’ To me, this is absurd. Why are you trying to play mind games with people by attempting to trick them into thinking that someone or something else is the ‘bad guy.’ Regardless of the reasons, this is a poor strategy: setting yourself up as a hero against some ‘villain’ is a losing proposition, and is silly at best. Treat tenants like grown-ups, regardless of the issue. Be fair, but honest. There is NO ENEMY, just the truth and the facts. If they signed the lease, and agreed to the terms, then show them that. If it is something outside the lease, remind them that that issue is not covered specifically, but may be covered under general language or state laws. Trying to be an ally is not going to win the argument: you don’t have to treat people like an ally or an enemy, only with simple respect: that’s what every tenant and every landlord deserves.

    • Andrew Syrios

      It’s not about tricking someone, it’s just the way you frame the issue. Either you frame it as a combative issue where you are taking on the tenant, or you frame it as an issue where the lease/policy/law dictates this and you have to find the best option for you given those constraints. Framing is key in negotiation, which is basically what dealing with tenants often boils down to.

  2. Lewis Christman

    My question is – what is your system when they pay slow / late. rent of 600, late fee of 100 applied and then they pay you 500. Do you tack on another 100 late fee next month and then how much in arrears to do you allow before eviction? Usually when they get behind they stay behind in my experience and the late fee just keeps racking up.

    • Sharon Rosendahl

      I am rewriting my lease since I acquired some new properties. I used to charge $100 late fee, this time I decided I would try a daily late fee. I’m thinking $20. I figured, what is the incentive to pay a couple days late when you could just put it off for another 2 weeks. The late fee is the same. This also would take care of the conundrum of what to do next month since it would just keep going up. I realize at some point, they won’t be able to pay it but quite frankly, I’m ready to get rid of them if they are more than a week or so late. My state doesn’t have a law that restricts late fees except to say it has to be in the lease. I do give tenants a bit of a gimme once per year.

  3. John Lambert

    Andrew, that was a great blog and it makes a lot of sense. My wife and I were into rentals for several years but the same problems, complaints, non payments, sob stories, etc… eventually burned us out. That and losing boatloads of money we had tied up with a real estate investment group that turned out to be crooks. When 2008 hit we unloaded and got out when many tenants stopped paying rent and our local judges made it difficult to evict them. As they say, time heals all wounds, and now I am ready to jump in again. Reading your blog it only reiterates that those problems will always be there. A lot of “professional” renters know the law better than the owner.

    • Andrew Syrios

      Making decisions can exhaust you, especially when someone is really angry at you. That’s why having systems and policies is so critical. You can fall back on them and don’t have to constantly remake decisions again and again and again.

  4. Wren Martin

    Andrew,
    Great Post! I especially like the tip “Make something else the Enemy.” I recognize others on here may disagree but this is an excellent way to deflect and it is exactly the truth in almost 100% of the cases… the Lease doesn’t allow this therefore the Lease is the Enemy. I had to help one of my Property Managers deal with a situation exactly this way early this morning. A tenant who regularly pays late and then begs that we waive the late fee. I will rarely allow a PM to waive a late fee, and never more than (1) per calendar year, as it only weakens our tenants resolve to pay on time next month. In this instance the PM waived the fee and then the next month refused to waive the next fee as a matter of policy… of course the tenant was over the top upset until I just firmly pointed out that the Lease stipulated a late fee and that was all there is to it, if the tenant doesn’t want to pay a late fee than it’s important that they pay on time. Afterward I reminded my PM that “No good deed goes unpunished.” and that it is extremely important that she follows the systems with exactness as most tenants will not get nearly as upset when turned down the first time they request a fee waiver but when they’ve been trained to expect one they will never forgive you when you must say “No” the next time.

    BTW, I was touring around Kansas City for my first visit just this week, and other than a little rain which us Arizona boys don’t experience often, I really enjoyed it. What a beautiful city and surrounding countryside… had me dreaming of all kinds of great investments. I will be back!

  5. Elizabeth Shelby

    I recently had the opportunity to look over a lease being used by a landlord and although there was a late fee clause they had added one that I thought was pretty good.
    It stated ‘The rent amount is $1700.00 per month, however, if rent is received either in advance or on the due date the monthly rent will be $1550.00.
    Average rents in the area for the size of property are $1550.00 so they weren’t losing anything by having tenants pay in advance or on time.
    They have over 35 rentals and rarely if ever receive a late payment, so the incentive seemed to work well in their case.

  6. Terrell Garren

    I used 12 month leases for several years then realized that just protects the tenant. Tenants will generally move when they want to move, a lease notwithstanding. Even though I rent long term, I only use month to month leases. I can ask misbehaving tenants to leave with 30 days notice and they know it.

    • Andrew Syrios

      I get this and have thought about doing it before, but I would generally recommend against it. For one, there is a psychological component to signing a year lease; namely tenants mentally sign up for a year. In addition, banks generally don’t like seeing month-to-month leases and it can be hard to get loan without them (particularly on an apartment).

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